Replaces my previous post, with clarifications.It seems to me...

Replaces my previous post, with clarifications.

It seems to me from TPID's form 8-K out last night that NBS is in close communication with TPID management (and thus James Mackay, since Mackay owns 96% of TPID). I say this because TPID has gone to great lengths to stress that its 96% shareholder (Mackay) has no "direct or indirect involvement whatsoever with Saddington." The way this information is stressed makes it look like a direct reply to the issues I have been raising in relation to NBS, and I suspect that Mackay is doing NBS management a favor here. It is much easier (less legally risky) to say this stuff via TPID's final SEC release as it de-lists rather than for NBS to broach this topic via an ASX release.

I suspect that the folks behind Saddington/CITP (whoever they are) have done NBS a big favor once before. In June 2009, when NBS realized it wasn't going to get a cent out of the Malaysian govt, NBS was suddenly able to invoice its ‘Chinese counterparty’ for an extra $20mill so that NBS could meet its profit target.

As I predicted in my last post, NBS's Chinese counterparty is now 70% owned by Saddington – a British Virgin Islands (BVI) registered company.
(I get the 70% figure from this document:
http://www.hoovers.com/free/co/secdoc.xhtml?ID=115393&ipage=5740614-1087-7606
My reading of subsequent SEC documents is that this 70% holding has now been transferred to Saddington, along with TPID's Chinese subsidiaries.)

Companies set up front companies in the BVI for three reasons: (i) to avoid paying tax, (ii) to avoid having to keep any financial statements or accounts (i.e., no one can find out if the company is making or losing money), and (iii) to keep shareholders/directors anonymous. I.e., BVI incorporation documents do not carry the name or identity of any shareholder or director. The names or identities of these persons do not appear in any public record. On this basis, it is very easy for the now de-listed TPID to say that Mackay now has no interest whatsoever in Saddington (and thus CITP) because no one can check to see if this is true.

I guess NBS shareholders now need to ask themselves four questions: (i) how comfortable do they feel with an anonymous BVI company controlling NBS's Chinese counterparty?, (ii) What is Saddington trying to hide by registering in the BVI? (iii) How confident are they that a Saddington controlled entity will honor all NBS receivables? and (iv) How confident are they that this contract will continue over the full 5 years?

Based on my knowledge of NBS, I personally wouldn't go near this company until the following 5 things have at least been achieved:
(1) The NBS technology is independently tested and unambiguously shown to work as intended. (There is one sketchy news report dating back to late last year indicating the Malaysian govt ran some kind of trial with the tech. If this is true, then it is significant that Malaysia has so far decided not to proceed with any rollout or even pay its $3mill receivable).
(2) NBS is awarded a patent for its technology by the USPO (we should know the answer to this in a few months).
(3) NBS remove any directors that a majority of shareholders/analysts consider to have made intentionally misleading comments to the market.
(4) NBS remove any directors who engage in public drunkenness or violence of any kind, and who are either convicted of such acts or placed on a good behavior bond. (This is important because, if a director was to behave in this way, then it would be very difficult for NBS to win any sensitive national security contracts).
(5) The auditor signs off on a FY10 balance sheet that shows that all FY09 receivables have been paid and that there are currently no large receivables past due or impaired.