There's an article in this week's TheEdge by Carson Block (Muddy Waters) on the role which short sellers play in a transparent, efficient market.
What's interesting is his list of examples of companies that'd been exposed of frauds by short sellers, some of which have "giant" investors, who ought to have done proper due diligence. Examples were HP (stake in Autonomy Corp), Caterpillar (stake in ERA Mining, listed in HK), Paulson & Co. , Richard Chandler (SinoForest).
The point made is not to rely on others' due diligence when investing...
I reproduce his last para which resonates with some of the posts in this thread,
Quote:Investors, even big ones, generally do not realise how few protections they have against frauds. Auditors do not scrutinise closely for frauds, and accounting firms have missed hundreds of frauds at companies throughout the years. Audits are generally about ensuring that companies have applied proper accounting treatments - in other words, public company audits are largely "tick the boxes" exercises. When a company is inventing revenues and profits, auditors will rarely figure this out. "Independent" directors, bankers and lawyers are not looking for frauds, either.
PS. He did mention CMZ as an example on the above point
The Battle for Investment Survival
{Markets values are fixed only in part by balance sheets and income statements; much more by the hopes and fears of humanity; by greed, ambition, acts of God, invention, financial stress and strain, weather, discovery, fashion, and numberless other causes impossible to be listed without omission.}
Another words, anything can happen to a company. Even the "TooMuchSick" or "The I C" stable of companies in Singapore.
If i am not mistakened some "Big shot" in SPH had been charged for "corruption" in the past. And it was in the public news.
Only the corruption was only a very small dent to SPH.
Offeree circular will be released within 2 weeks of dispatch of offer documents, which is latest by the 4th of October 2013 (next Friday).
If anybody is still holding on to this counter, I think it is still better to wait for the release before making any decision.
Correction: Offeree Circular will be released earliest on 4th October (this Friday) and latest by 11th October (next Friday).
Most likely this Friday after trading hours since the offer will end by 18th October, it is only fair to give more time to shareholders for consideration.
Indofood now owns 63.57% of outstanding shares.
(18-10-2013, 10:46 PM)CY09 Wrote: [ -> ]Offer has closed
http://infopub.sgx.com/FileOpen/Close_of...eID=260342
They only collected 89.03%. Sad fact, guess CMZ will still be listed
<Previously vested>
Interesting how close they got.
Nothing sad about that? Those that wants it to remain listed have their way, those that wants to sell sold them. All is good.
It is indeed interesting (and surprising too) how close they got. Previous estimates bought up in this thread were in the range of 60-70% (including myself).
With Management holding 6.64% of shares and assuming that they intend to hold it, rendering this bunch of shares relatively illiquid as well, this effectively means only 100-89.03-6.64 = 4.33% of shares are now considered liquid. This 4.33% represents about 30-40mil of free float market cap. From a highly liquid+free float situation, CMZ now becomes a pretty low free float listed entity. It will be interesting to see how things pan out in the future.
disclosure: did not tender out my relatively small portion of CMZ shares
Looking at how SEHK-listed First Pacific underlying businesses tend to pay cash-flow upstream to holding companies in the form of distributions, maybe we can see China Minzhong paying a reasonable dividend going forward ?
(Not Vested)
If mgt is considered one block of 6.64%, then public free float already below 10%.
Wait 6 months to see if there is another offer.