China athletic footwear outlook, page-151

I am interested in the original motivation of the owners to list their company on the ASX.

They only raised $15m. They already had cash in the bank and didn’t need any additional funds to the business. 
Their initial motivation seems to be a back door way of moving their wealth outside of China. They put in a lot of effort to prepare a prospectus , issue statutory accounts and then initially comply with the requirements of the ASX..  I don’t think at this time their was any intention of ripping off the Australian shareholders of their  $15m. 

Their ASX lIsting strategy turned out to be a mistake. The business hasn’t grown and meet the growth targets set in the prospectus... It has stagnated in a footwear market that is growing at 10%.

XPD has invested heavily in building their brand in China by paying to refurbish the stores of the shop owners selling their shoes. This investment didn’t generate additional sales.. 

They sold shoes to their customers with extended credit terms..sales have stagnated and then shrunk. This strategy didn’t work.

They hired a high level sales manager to grow revenue.  This didn’t work and she left

They invested heavily in a new factory and production lines to help meet the forcast sales growth which didn’t happen...It isn’t clear what is happening with this factory. There used to be photo’s of the factory and production lines on the old web site. 

Based on what we know the business hasn’t grown in a high growth economy. Is from poor management or under reporting of sales.

Why risk going to jail for fraud when he could buy the company back for peanuts.