China Minzhong / Glacaus Research

China Minzhong / Glacaus Research: In a quick rebuttal to China Minzhong’s response this morning, Glacaus Research has just released another report. Glacaus reiterate that its opinions were based on publicly available documents from independent third parties such as government registries and SAIC filing offices, and to rebut its opinion, Minzhong has offered investors non-public records (such as tax filings), which Minzhong knows that neither the house nor any other investor can verify or obtain because of their non-public nature. In house view, this is not a coincidence. The balance of Minzhong’s supporting documents were either generated by the Co, thus undermining Glacaus credibility and importance, or were affidavits from suppliers and customers, who by the Company’s own admission operated businesses without licenses or without being properly incorporated. For investors, auditors and regulators, the most critical aspect of the response is with regards to the 2010 SAIC filings, which show that two key operating subsidiaries had tiny revenues, few assets and operated at either a net loss or at break even. In both cases, Glacaus presented SAIC filings from 2011, in each case audited by a different local accountant from the previous year, which mysteriously showed completely different historical financials for 2010. In house opinion, the Co simply doctored its historical filings to make them appear more consistent with the Singapore-filed financials. The Co’s response is that it used an ‘agent’ to file their SAIC files before 2011, and as a result, those pre-2011 SAIC filings, which show a small and unprofitable business, were the false and inaccurate documents. Instead, Minzhong asks the market to believe that the 2011 SAIC files are the ones to be believed. The problem with this argument is that Minzhong’s Chairman signed both the 2010 and 2011 SAIC filings. One of the filings is inaccurate. Conclude that readers must decide which set of documents, submitted with the signature of the Chairman to the Chinese government in order to comply with PRC law, are false. Ultimately, based on the available information, house continue to believe that the most plausible interpretation of the evidence available in the public domain is that the Co is a fraction of its reported size and profitability and that it has made materially false and misleading statements to the public in connection with its IPO and subsequent public market activities. https://glaucusresearch.com/wp-content/uploads/downloads/2013/09/GlaucusResearch-Rebuttal_to_China_Minzhong-SGX_K2N-BBerg_MINZ_SP-Strong_Sell_September_2_2013.pdf