Hi Mike, unfortunately this is the risk when you purchase shares in a company which is not domiciled in on the local exchange.
Especially for a country which is tough to monitor and has almost no publicly accessible information.
This stock is exactly the same as XPD. Although the auditors previously signed off on a profitable and no debt business as you state there is nothing else of any substance which backs this up. The worst part of it is unless you actually physically travel to China and go into the many supposed stores can you see for yourself otherwise again there is no way to verify this.
It completely different when you buy into say Greencross, myer, super retail etc etc it right there in black and white. There are real customers, a real store real business.
There is nothing of any substance here. You could probably complain about the auditors, about asic but in the end it not their fault, they have responsibilities but if they fulfilled their due diligent but were misled by the directors what can they do?
It very easy to just fraudulently paint a green rosy picture of a lot of money in a bank account especially when it in chinese and say "hey that money is ours, we have no debt". The auditors again can only do so much.
TTC Price at posting:
5.8¢ Sentiment: None Disclosure: Not Held
