Midas Holdings

Looks like nothing is free in this world.

http://infopub.sgx.com/FileOpen/SGX-MIDA...eID=488394

(Not Vested)

(09-02-2018, 02:00 PM)corydorus Wrote: Looks like nothing is free in this world.

http://infopub.sgx.com/FileOpen/SGX-MIDA...eID=488394

(Not Vested)

This is a very interesting case study on mental blind spots all of us suffer from time to time. When the price gap first opened up between SGX and HKEX spots, most people seemed to suspect there was price manipulation at SGX for nefarious motives. That was the basis of the recent petition. The most common theory going around then was that insiders were artificially depressing prices in SGX in order to privatize and/or relist in HKEX.

Implicit in these theories was the assumption that the SGX price was the 'wrong' one being manipulated and HKEX price was the 'correct' one. Now in retrospect it seems painfully obvious that the reverse could just as well be true, SGX prices were actually reflecting of the drama that was to come. The HKEX price was in fact 'wrong'. I think all of us, invested or not, can and should learn something out of this.

(09-02-2018, 10:25 PM)mobo Wrote:

(09-02-2018, 02:00 PM)corydorus Wrote: Looks like nothing is free in this world.

http://infopub.sgx.com/FileOpen/SGX-MIDA...eID=488394

(Not Vested)

This is a very interesting case study on mental blind spots all of us suffer from time to time. When the price gap first opened up between SGX and HKEX spots, most people seemed to suspect there was price manipulation at SGX for nefarious motives. That was the basis of the recent petition. The most common theory going around then was that insiders were artificially depressing prices in SGX in order to privatize and/or relist in HKEX.

Implicit in these theories was the assumption that the SGX price was the 'wrong' one being manipulated and HKEX price was the 'correct' one. Now in retrospect it seems painfully obvious that the reverse could just as well be true, SGX prices were actually reflecting of the drama that was to come. The HKEX price was in fact 'wrong'. I think all of us, invested or not, can and should learn something out of this.

what i learned.
1)  Whoever names a company Midas hoping to use his affliation with gold obviously has not read the story properly.
2)  whatever dodgy stuff happens in HK listco,  can be just as dodgy as mainland S-Chips
3) Dun buy Schip or listco based in HK but come list on SGX.

(09-02-2018, 10:34 PM)BlueKelah Wrote: what i learned.
1)  Whoever names a company Midas hoping to use his affliation with gold obviously has not read the story properly.
2)  whatever dodgy stuff happens in HK listco,  can be just as dodgy as mainland S-Chips
3) Dun buy Schip or listco based in HK but come list on SGX.

Just to clarify, Midas was first listed on SGX before it was secondary listed on HKEX
http://midas.listedcompany.com/

Some notes from a kind forumer on some differences: https://www.valuebuddies.com/thread-3875...#pid144590

I feel it is still early to really decide on the "lessons learnt" while the dust haven't settled. At the same time, more information has yet to be revealed or special audit to be performed.
The "lessons" you mentioned are very "intuitive" and sometimes i like to think that these are heuristics that our brain can easily come up with - they are easy and useful most times, but i thought as investors (long term), it would be beneficial to keep heuristics at bay, and objectively look at both sides of the coin before zooming down into the rootcause or create the right "mental model" (i am not literally good enough to describe this good enough and have to borrow from Charlie Munger)

Secondary listing in Hongkong do not require minimum spread of shareholders. As long as HKSE is satisfied with the protection of shareholders on the primary listing exchange, generally they do not question the trading patterns of the secondary listed stock. In the case of Midas, the volume traded on SGX was much bigger than HKSE but the price was very much lower....which defied logic. Although the shares are fully fungible, there is at least a 6 week delay in doing the complete cross border transfer. Of course, with hindsight, we now know the price traded in Hongkong was probably fake and probably with the intention to induce purchases in SGX. Hope the authorities have enough evidence to initiate an investigation.

Hi Activist,

You are exactly right! There seems to be something fishy which I too cant get a grasp on. As my previous post, I had subtly hinted on the 6 weeks cross border transfer; and since the unusual price movement in the 3rd Jan 18, we are moving into the sixth week of that. Coincidence? I personally don't think so. My hypothesis is that someone is trying to profit/offload their stake

One of the underlying premise to my hypothesis is that something bad has happened to Midas. Only after the investigation will we know if my premise is true.

<I had signed on the petition on the strange price movement on Midas on December 17>

The sudden resignation of CEO Patrick Chew .

http://infopub.sgx.com/Apps?A=COW_CorpAn...c9252fb1b7

So, its either the Singaporean CEO Patrick Chew was in bed with the Chairman, or he was really kept completely in the dark?

OVERSEAS REGULATORY ANNOUNCEMENT INSIDE INFORMATION:
http://infopub.sgx.com/FileOpen/Announce...eID=493788


- Midas has real products and are suppliers to real customers. It's P/L and balance sheet are (probably) real - until the extent where it hasn't account for the liabilities that was discovered recently.

- It has a Singaporean "founder" CEO who was with the company since it started in 2000. The CEO is reasonably vested in Midas to have skin in the game.

- Looking at the Board of Directors - it can boast an ex-Minister of State and an ex-Dean from School of Law as its Independent Directors - probably people who have more reputation to lose for the sake of gaining funny money.

- Chairman was once really rich (https://www.valuebuddies.com/thread-1333...l#pid14299) with probable "shady" dealings in the past - There is always a question of why one would want to list their domestic operations in an overseas setting (forget all the "it takes a long time to get listed on the stock exchange in China" thing)?

- Since its primary listing on SGX in 2004, it has "survived" at least 13 years as listed shell - undergoing all the various audits and scrutiny. Probably it passes all of them with flying colors because it as real businesses and real customers. So what gives?

Another S-chip bite the dust.

CEO mentioned he did not endorse the loan with his legal representative stamp, despite the stamps being affixed on the agreement. If it is an unauthorized transaction, it can be voided under the law. The perpetrator can be caught and prosecuted, while Midas need not fulfill the loan obligations IF the court takes it as unauthorised.

So let's wait and see what is the verdict of the China judiciary; will the Chinese court deem it as an unauthorized transaction or was it a genuine transaction and that Midas CEO actually had knowledge of them