China Minzhong Food Corporation

[pianist]

Seriously, if their fraud is really so blatant (faking their largest customer etc), why no one before us, GIC or Indofood, realized before hand? What are the buy side analyst doing? Why didn't I realize before hand? Gosh.

No need to feel awful. Everyone makes mistakes. Live and learn. What doesn't kill you, will make you stronger.

One thing to remember regarding GIC is that they invested a long time ago. It is entirely possible that at that time, China Minzhong was fully legitimate. However the company's farming acreage quadrupled in size in the subsequent years.

Most likely, GIC did not check as thoroughly after investing. It's like buying a 4-block complex of buildings when only the first block is up - if the first block checks out, you pay up and assume the other 3 upcoming blocks will be of the same quality. However, there is no guarantee that these future blocks will indeed be of equivalent quality unless you inspect them as closely as you did the first block - which you probably won't.

I realized this last year and got out. The loss was painful, but I've had worse. With Minzhong I broke 3 simple rules of thumb. It had a limited track record, the managers were not the largest shareholders, and the business model consumed cash instead of generating it. China Minzhong is/was a reminder that I should not try to outsmart myself too often. Rules exist for a reason - to keep us out of trouble! Rules can be broken, but at one's own peril.

I only bailed in after Indofood bailed in..

As for Indofood, the controlling shareholder is Anthoni Salim, the youngest brother of Andree Halim, who controls QAF. Their father is the late Sudono Salim a.k.a. Liem Sioe Liong. Why is this relevant? Because in June 2005, QAF bought 55% of China Food Industries, which was subsequently discovered to be a fraud. Clearly, QAF didn't do its due diligence properly, and now, it seems, Indofood didn't either. Does this hands-off approach to investing run in the family? Only the brothers themselves know for sure.

based on the above info, i am wondering if anthoni salim is overpaying for Guthrie in the current GO by the M & S controlling shareholders? if yes, we shld accept his GO?