Saturday, May 31, 2014

YZJ update 3: Trying to figure out the accusations

Below is what I posted at valuebuddies. The first part was a reply to a fellow forummer.

[quote='yeokiwi' pid='84646' dateline='1401546694']
The three agreements that were signed between 成清波 and 任元林.

As a listed company, can these kind of agreements be signed without informing the rest of the shareholders?

The main accusation is based on the following paragraph:
甲方: 成清波
乙方: 任元林

极配合;对于天津国恒 2013 年度财务决算和财务会计报告书编制必须有乙方人
员参加并会签,同时甲方必须确保天津国恒 2013 年度盈利和在经乙方同意的情
权利。另外,如果标的股票股价连续 3 个交易日下跌,或跌至 1.5 元/股以下,乙

Hi YeoKiwi and CF,

I read through the original agreement: (the 046 report),

the terms of conditions include (pg 6)

There is condition of secrecy. Hmm... Isn't 成清波 shooting himself?

If that is the case, the third accusation (三)涉嫌侵犯上市公司独立运作
Doesn't hold, isn't it?
They are making a loss
Company suspended on 5 May

Also, since the shares are transferred to TaiXingLiyuan, TXLY is effectively the biggest shareholder with management rights, but because 成清波 has the rights to repurchase the shares, TXLY thereby gave management rights to 成清波 and co, subjected to various conditions, apparently, the profitability and no suspension conditions are not meet.

The crux of the argument is insider trading, the buying of shares after the agreement is sealed. I read the document a few times, I couldn't find a clause that stated YZJ cannot buy more of Tianjin GuoHeng Railway.

Also, the harsh conditions of profitability, no lower than $1.5 etc, are merely conditions, does it constitute as insider info? There is no guarantee of profits.


Accusation 4 (Above)is even more bewildering.
将标的股票以大宗交易方式过户至泰兴市力元投资有限公司。 (pg8)

I assume 大宗交易 means married deal, that was agreed during the supplement contract, when TXLY come into the picture.

I am not a lawyer, but if I can find so many question marks, it does not seem like Ren will just lose the legal battle when it starts.


  1. sillyinvestor,

    You shout wave!

    Now readers have to find the wind themselves ;)

  2. SMOL,

    I again catch no balls... Can only guess what u mean

  3. YZJ just posted their response to SGX

  4. Yup I saw. Pretty much business as usual as I expect.

    I think this episode really enlighten me how YZJ HTM works.

  5. Would you jump right back to buy yzj ? 😁😁😁
    I still could not understand his the htm works, care to blog it ?

  6. I don't think I will buy back if prices remain at current level. I want more MOS. I think YZJ will emerge from this with zero or minimal damages, but it highlighted the risk of HTM.

    Sure, I will blog about it tonight

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