Chuan Hup Holdings

[weijian]

Investing 5.5mil back in 2019 would be ~4% of its cash and <2% of its total paper equity of Chuan Hup Holdings. I wonder what is worst - giving back real profits from a fake investment OR letting everyone know that you invested money in an (obviously) fake investment?

Nonetheless, they were pretty good, weren't they? Getting a ~62% annualized return from their 5.5mil while their CEO (probably) got nothing from his own personal investment.

Envy Asset Management liquidators given nod to claw back S$2.3 million from Chuan Hup’s unit

CH Biovest invested S$5.5 million with Envy Asset Management for eight months to February 2020 and received S$7.8 million in return, making a profit of S$2.3 million.
https://www.businesstimes.com.sg/compani...w-back-s23

Other notable names allegedly cheated by Ng include the chairman of Vickers Capital Group Finian Tan and chief executive officer of Chuan Hup Holdings Terence Peh. The charge sheets state that the investment professionals were swindled of US$19.2 million and S$3 million respectively.
https://www.businesstimes.com.sg/compani...esan-among

[Big Toe]

Was vested in Chuan Hup decades ago, itself is an upright company that paid great dividends. Fell victim to fraud. Reminded me of venture manaufacturing who took a large hit when when subprime securities went belly up. So even experienced business leaders with a keen nose for investment can fall victim to fraud.

For me, I somewhat take a similar apprach as the late Charlie Munger. I would assume that all business will fail unless proven otherwise. The more evidence gathered, the better the investment case and it would mean going down to site for a few visits and watch their daily operations whenever possible. Capital presevation is key. It is all too easy to have a permanment loss to capital if not careful. This would also mean I am unable to cover many different companies/industries due to limited bandwidth to investigate. But for most of the ones that I do know, I probably know them better than anyone else.

[weijian]

Hi BigToe,

Just to clarify my earlier post - falling to fraud previously doesn't take away their earlier accomplishments. But of course, earlier accomplishments doesn't mean future accomplishments too.

Actual monetary losses are a small dent on these victims' balance sheet, so no one is going to go belly up and this means their risk management is solid. But it does puzzle one why would a professional management team with a proven track record, actually believe in a scheme where 95% of VBs here know is a ponzi from the outside.

Was it greed? Was it hubris? Was it envy? Was it the charisma of Ng Yu Zhi (the mastermind)? Or was it a combination all all these resulting in a lollapalooza?

[Big Toe]

At least for Venture, it is most likely the bankers who convinced the management team to park their mountian of ilding cash to work. Intention on venture's part is good, probably somewhat same as Chuan Hup. Bankers will sell anything and everything at the highest possible price, until it blows up.

I recently had the unfortunate expereince in dealing with a in person business scammer(whom wanted to buy coffeeshops and many other businesses). In any case, I asked him to show me the money and did a background check, so the scam did not work on me. However it did waste some of my time. I found out he did manage to con a number of people in the past, went to jail, came out, resumed his full time job of swindling.

Here is what I noticed.
1. he had charisma
2. he somewhat knows his stuff(but not entirely)
3. he offers a somewhat realistic good deal
4. he dont work alone
5. he somewhat managed to have some 'proof' of his claim, with real hard cash backing it. (this one I cant figure out, probably managed to swindle someone to put out money in his name)
6. he knows it is wrong but continues to do it anyway, probably proud of the fact he managed to pull it off so many times. When exposed he just smiled and laughed it off.

But as the lies get bigger, plenty of loopholes.
I would assume the victims probably noticed it too but choose to ignore them and did bother to do a background check.

[specuvestor]

Thanks Big Toe for the 6 indicators

I think another technique of financial product scammers (not the download app or threat based scams) is they either fan your ego, or pierce your ego so you had to prove yourself

For Venture I met the previous CFO who obviously didn't understand the product but was enticed by the yield. In short Venture "ventured" into things they had no expertise in, rather than having a keen or good nose Circle of competence fail or was it also another $200m ego trip?

[ghchua]

I guess for Chuan Hup, being an investment holding company, they can diversify their investments across different platforms, be it securities (public or private), physical assets (developments and investment properties), businesses etc to lower their risk exposure to one single asset.

Having learnt their lesson for their investment in Pacific Star Development Limited, I think they will also learn to be better from this latest setback. I see them focusing back to where they are strong at currently, namely property developments in Western Australia and Queensland plus also in Singapore. Hopefully, these actions will minimize more mistakes in future and deliver better returns to all shareholders going forward.