HK Commercial Crime Bureau is believed to have started investigating the company China Metal Recycling for allegedly faking its balance sheet

(773) China Metal Recycling:
Apple Daily reported that HK Police arrested 2 individuals related to China Metal Recycling last Friday, and the Commercial Crime Bureau is believed to have started investigating the company for allegedly faking its balance sheet. Officers visited the company’s offices in Central on Friday and Saturday, taking away documents.
(773 HK) @ HK$: market cap. US$0.0m, daily liquidity US$0.0m. Broker forecasts:  buys,  holds,  sells, 0.0x current year P/E, 0.0% yield.

(773) China Metal Recycling: SFC has presented a petition to the Court of First Instance to wind up China Metal Recycling (Holdings) Limited. These applications follow an SFC investigation that found evidence suggesting that China Metal Recycling has overstated its financial position in the prospectus used for its initial public offering in 2009 and in its annual report for 2009. The SFC alleges that this was achieved by inflating the size of the company’s business and the amount of revenue generated by its major subsidiary. The SFC alleges that an overwhelming majority of the subsidiary’s purported purchases from its three major suppliers for the financial years ended 31 December 2007, 2008 and 2009 were fictitious by escalating amounts in each successive year. The SFC’s investigation also found evidence showing that the suspected exaggeration of China Metal Recycling’s financial situation remains a current issue that would affect its 2012 financial results, which to date remain unissued . China Metal Recycling said an order was granted by the High Court of the Hong Kong Special Administrative Region on 26 July 2013 appointing Cosimo Borrelli and Chi Lai Man Jocelyn, both of Borrelli Walsh Limited, as provisional liquidators to Chin a Metal Recycling on the application of the SFC. In response to the SFC’s file, the single largest shareholder of the company, Wellrun Limited expressed objection, saying that the act does not meet the interests of shareholders. The Company has arranged legal counsel to follow the issue.

Two nabbed as SFC says China Metal lied
Victor Cheung
Tuesday, July 30, 2013
Hong Kong police is understood to have arrested two individuals related to China Metal Recycling (0773) on Friday, it was learned last night. The Commercial Crime Bureau is believed to have started investigating the company on Friday for allegedly faking its balance sheet. Officers visited the company’s offices in Central on Friday and Saturday, taking away documents. One of the individuals arrested is a 46-year old man surnamed Lam and another is a 42-year old woman surnamed Lai. Both are locals and currently on bail. The Securities and Futures Commission, which is seeking to liquidate China Metal Recycling, yesterday accused the firm of inflating the size of its business and revenue before listing in 2009. The regulator, which applied on Friday to wind up the listed firm under the Securities and Futures Ordinance in a first, said China Metal had overstated its financial position in the prospectus used for its June 2009 initial public offering that raised HK$1.55 billion. An “overwhelming majority” of purported purchases by one of the firm’s subsidiaries from its three major suppliers for 2007-09, were “fictitious by escalating amounts in each successive year,” the SFC alleged. With the court granting orders to appoint Borrelli Walsh as provisional liquidators, the board of directors will be suspended. The court would void any disposition of the firm’s property and any share transfers. The matter will return to the court for a hearing on Friday. China Metal chairman and major shareholder Chun Chi-wai yesterday objected to the winding up, saying the move would not be beneficial for shareholders. The Guangzhou-based firm’s shares have been suspended since January 28 after shortseller Glaucus Research made allegations against it. Just three days before, Chun signed a deal to sell 29 percent of the state-owned firm for HK$3.4 billion. Deloitte, the auditor for China Metal, said there is no suggestion of any fault on its part.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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