China – AIM just does not get it – shocking revelation

Comments

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   Paul Scott

   22 February 2015, 06:31

   Well said Tom. I have also heard through the grapevine that the LSE has actively sought out listings from countries such as China. Which is an absolute disgrace.

   It’s upsetting to see our whole financial system crumbling, as the people in charge today just don’t seem to have any ethics, or pride. They just seek to maximise profits, earn bonuses, and sod the consequences. This is the big systemic problem in finance generally in the UK right now. Somehow we need to get this cleaned up. Your efforts are very much appreciated by those of us who care about standards & ethics, and want to see things cleaned up.

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   Dave Green

   22 February 2015, 09:07

   This is a national scandal and kudos to shareprophets for highlighting this racket.

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   rob

   22 February 2015, 14:24

   isn’t there a higher command that can be complained to ?

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   Jock

   22 February 2015, 15:31

   Tom,

   You’re spot again-LSE is solely interested in short term gain regardless of the consequences.

   However, it goes beyond that- the whole system is rotten and this is why fraudsters such as Houyan Lin, Rob Terry and Doug Ware choose AIM.

   The nomads and PR firms know the score but choose to look the other way and bank the retainer.

   This is why I am almost certain Rob Terry will never be prosecuted for the fraud at Quindell- as to do so would do catastrophic damage to AIM and put advisors, PRs etc in the dock too.

   The vested interests would not want to see that happen and the FCA and SFO don’t have the stomach for the fight.

   As Terry has shown, AIM is frankly a great place to make millions in complex frauds, and get away with it.

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   Mac

   22 February 2015, 16:07

   Tom, whilst I appreciate everything you do on Shareprophets I have to disagree with the sentiment that banning specific countries is suddenly going to make the quality of AIM companies better. The China 4 you refer to are (I have no doubt) slam dunk frauds but, and here’s the thing, being from China is not what allowed them to be frauds. It was because the NOMADs, reporting accounts, lawyers and LSE didn’t do their homework and have no teeth to act as a deterrent. Make no mistake, if you change the rules and ensure that the bar is high enough to IPO with punitive measures for those promoting such ventures when they go wrong then we really shouldn’t care where a company comes from.

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   nigel somerville

   22 February 2015, 23:50

   Mac – it is not an issue of changing the rules and raising the bar. The issue is that the whole thing is corrupt. With Nomads the poacher is paying the gamekeeper. The LSE wants more business and so leaves regulation to the Nomads. The FCA thinks it is beneath it to look at the dregs – it wants cases worth billions (oh, QPP!) Just as with Savile the establishment is looking the other way. Nobody believes the victims. The authorities are more worried about reputational damage than the crimes.

   Box-ticking (our national pastime) will not do. That is why a subsidiary of ARGP has managed to file two contradictory sets of accounts for the same year (I kid you not). Accounts have been filed, box ticked. Doesn’t matter what is in the accounts – one set is patently untrue from top to bottom – the LSE doesn’t care, ARGP is a customer (ker-ching), the FCA won’t lift a finger.

   I kind of take your point about stopping any more listings from China. But if we have all four on AIM proved to be frauds (one pretty much there already and three surely questionable), how many more alarm bells do you need?
   Surely the regulators would think about perfectly good markets to list on in HK, Shanghai etc. Why not there? Chinese listings I suppose are fine, but surely the LSE would apply a rather greater level of scrutiny. NO! LSE gets more dosh, Nomad gets more dosh, so do the Lawyers, Accountants, PRs, NEDs etc etc. Who is going to stop the gravy train?

   That is why Tom is right.

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   Mac

   23 February 2015, 06:29

   Hi Nigel. My point about China is that I don’t believe the Chinese are genetically predisposed more than any other race to commit fraud and that ‘China 4’ are a symptom of a toothless market. Tom is right to suggest that a company IPOing thousands of miles from home is a giant red flag but banning these would simply be treating a symptom not the root cause.

   Yes, NOMAD/brokers are conflicted given the retainer fee is paltry in comparison to the fundraising fee. However, conflicts exist in any number of markets and are managed with the right mix of incentives. Note – I am not referring here to box ticking checks and balances but moreover carrots and sticks. I think we are all agreed it is all carrots and no stick at the moment.

   There is no reason why raising the bar and changing the rules wouldn’t work. Change the balance of incentives for the gatekeepers and you change human behaviour. Just look at drink driving in Scotland now they have draconian limits in place (a bad example but you get the idea). This is simple economics in action and would work just as readily for AIM as any other market where conflicts exist.

   Also, these incentives need to go for the regulators too. If you paid the lowly regulation folk on convictions/contraventions of the AIM rules (a la traffic wardens in certain towns) I’m quite certain you would quite quickly see a lot more companies being reprimanded rather than wrist slapping behind closed doors.

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   alcira16247

   23 February 2015, 08:58

   Tom

   We seem to be witnessing the further sad decline of our nation as self interest, short termism, greed, lies and corruption of both corporations and individuals become the order of the day.

   Of course, the politicians, regulators and the establishment generally are quite happy with the situation as their snouts are deep in the trough, too!

   After all, when you hear Jack Straw declare he charges £5000.00 per day, for his services, you know the world’s gone totally mad!

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   Daniel Victor

   23 February 2015, 11:29

   Mac,I fear that you are mistaken – and here’s why.The Chinese have not confined their frauds to AIM.There have been a number of Chinese frauds which were reversed into existing companies on the US markets.One method of proving that these were fraudulent had been to compare the accounts that they lodged in the USA with those that they lodged in China, and check for discrepancies [there being severe penalties if they submitted fraudulent accounts in China]. Far from stamping down on these frauds,the Chinese authorities allowed companies to keep the accounts that they lodged in China confidential.

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    its me

    23 February 2015, 16:16

    Don’t forget the LSE has/had rep offices in HK and Beijing historically in some cases deals were passed to promoters who then sourced a NOMAD, poorly run show out there.

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    J P Spaghetti

    3 March 2015, 09:14

    “Emergence of new word “duang” in China generates millions of shares, despite no-one knowing what it actually means”

    So what’s all this about then? Just seen it on MSN news! Don’t wish to be complicit in generating publicity if it’s pure BS, by the way, so if it is just keep stum!

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    Equals4

    21 May 2015, 13:24

    Tom,

    A cracker for you this one, from our friends at Zero Hedge
    http://www.zerohedge.com/news/2015-05-21/chinese-virus-spreads-germany-meet-company-went-record-high-zero-1-week

    From….wait for it….Fujian region
    Listed on….wait for it…Frankfurt Stock Exchange!!