SEEKERS MARKETS LIMITED 中南金融有限公司

The Provisional Liquidators appointed by the Bermuda court oppose a winding-up order in HK but are overruled, on the petition by HEC Securities Ltd, now named Seekers Markets Ltd.

Webb-site can reveal another SFC investigation underway involving dealings in Pak Wing (8316). The manipulation of this GEM bubble reveals another connection between China Huarong (2799) and what we call the "Chung Nam Network". The more we scrutinise Huarong, the worse it looks. Will the State end up bailing out the bailer?

Webb-site has deduced that these are assets of Mr Yang Zhihui, missing Chairman and majority shareholder of Landing (0582), and that he is reasonably suspected of fraud causing losses of HK$10.17bn to China Huarong (2799), the ex-Chairman of which is under a corruption investigation in China. We also turn the spotlight on China Goldjoy (1282) which was an enthusiastic buyer of Landing at prices far higher than its Chairman paid beforehand.

The price of $1.25 per share is 2.5x the $0.50 at which Pak Wing's Chairman, Zhang Weijie, placed 74.52m shares via Freeman on 13-Jul-2017 which went to Win Wind Securities. After some market sales, we can see 63.66m shares remaining in WW by 3-Oct-2017, after which blocks moved from WW to Satinu Markets (and 7.452m out of CCASS) until Freeman picked them all up in this purchase. All of WW, Satinu and Freeman are in what we call the "Chung Nam Network". The foundation subcontractor had net tangible assets of just $0.002 per share at 30-Sep-2017.

This exhausts the 20% general issue mandate. The HK$124m net subscription proceeds would be distributed as part of a $172m special dividend, so this becomes an exercise in changing the ownership structure. VMS would have 16.67% while Enerchina (0622) would be diluted to 16.48% and Murtsa Capital to 5.74%. Their combined holding would be 38.89%, over the 30% takeover threshold if they are acting in concert. Update: on 4-Jul-2018 the deal was terminated due to "protracted regulatory processes".

Enerchina Securities is owned by Enerchina (0622) and is part of what we call the "Chung Nam Network". The controller of Landing is its Chairman, Yang Zhihui. We could be in for a hard Landing.

MC fails to say who owns Cordoba, but we can tell you that as of 18-Sep-2012, it was 100% owned by HEC Capital Ltd, which is at the core of the Chung Nam Network and also owns HEC Securities Ltd, which is currently underwriting an open offer of new shares by MC to raise $209.7m net - so half of that goes back. HECC owns 9.19% of MC.

Penta successfully sues a BVI company at the centre of what we call the "Chung Nam Network" over a guarantee of a profit from a subscription of shares in Mascotte (0136) which followed a heavy loss on an earlier subscription in Freeman (0279). The claimed quantum is HK$211m. After a restructuring, Allied Weli is now a 100% subsidiary of HEC Capital Ltd.

In the first of a multi-part series, we delve into a transaction by the HK offshoot of Xinhua, the PRC's official news agency, and the people behind it.

This relates to the vote-rigging of the headcount in PCCW's privatisation exposed by Webb-site in 2009. The judge in the Court of First Instance said "I agree with the submission of the SFC that there are sufficiently cogent reasons to infer that the 132... persons in whose names the single board lots were acquired through Chung Nam...did so as a result of a plan devised by Eugene Chuang...to boost the head-count...The purchase of 125 single board lots would appear to have been financed by Eugene Chuang".

For failing to disclose promptly the humungous losses on investments which, we note, were made after the company became a member of what we call the "Chung Nam Network".

Take a RMB8m investment in a start-up TV channel, whip up some projections, sprinkle on a valuation from the ubiquitous BMI Appraisals, add a large pinch of salt according to taste, bake for 2 months and you have a RMB350m sale to Code Agriculture (8153). Too bad that the air then went out of this pudding.

We warn investors of a bubble in the stock of China Strategic, the 80% owner of the proposed buyer of Taiwan's Nan Shan Life Insurance, partly financed by a massive note issue convertible into 78bn shares at $0.10 each. We publish the placing list and analyse the names in the deal. Finally, we warn investors to avoid 7 companies in the "Chung Nam network", which has lost HK$6.2bn in 5 years.

In part 2 of a series, we look at how HK$16bn of market cap evaporated when bubbles around China Railway Logistics, PME and Forefront burst. Each dealt with the same purported arm of the Ministry of Railways for joint ventures in wagon-leasing, media and online ticketing, each of which failed to get started. A miriad of BVI shells with shadowy owners are involved, but at least one has exposed himself in a court case.

In our view the judgment in the Court of First Instance on PCCW's scheme of arrangement and the alleged vote-rigging provides ample grounds for appeal. We look at the ruling in detail and where the SFC may be taking this case on Thursday at the Court of Appeal.