Icon8888 Gossips About Stocks

Author: Icon8888   |   Latest post: Wed, 30 Jan 2019, 10:11 PM


(Icon) Is This How Red Chips Con Us About Their Cash ?

Author:   |    Publish date:

While I was going through the Billion Dollar Whxxx (story about how JL siphoned off billions from 1MXX to his own accounts), I came across something very interesting. 


The following is a summary :


Deloxxxx was the auditor of 1MXX. To sign off the accounts, they demanded that 1MXX proved that they still own the USD2 billion cash by bringing them back to Malaysia.


Of course, if JL still has the USD2 billion cash, he could easily just transfered them back. Unfortunately, he has already spent most of the money and has only about USD300 mil left. So, JL came up with a simple trick.


He transferred his USD300 mil to 1MXX, then got 1MXX to transfer the money back to him. Then he transferred to 1MXX, and 1MXX transfered back to him again. They repeated the process a few times. The several rounds of transfers from JL's accounts to 1MXX was then presented to Deloxxxx as proof of money coming home.


Guess what ? Deloxxxx accepted them as evidence. They were satisfied and signed off the accounts.     


This made me wonder whether that was the way Red Chips created their cash. For those uninitiated, Malaysian investors had long been perplexed by Red Chips listed on Bursa. Almost all of them are penny stocks, but they hold huge amount of cash. The cash is usually several times their market capitalisation. This leads many investors to feel that they are undervalued (backed by so much cash !!!) and are hence safe to invest in. But almost all these companies eventually got into troubles and some were delisted. Many investors suffered permanent losses.   


Malaysian investors clearly smell something fishy, but nobody can explain what is happening. The cash seemed to be real !!! In one occasion, some investors visited a particular Red Chip in its home country and was shown the documentary evidence of their cash holding in the bank.  


After reading the Billion Dollar Whxxx, I think we might have found the answer. The Red Chips' accounts are audited once in a year. During that few days when the auditors are around, they will borrow money and transferred them into their bank accounts (the lender can place restrictive covenants on the accounts such that money cannot be moved out without their consent).


When the auditors look at the bank accounts, the money is there !!! So, they happily sign off.


Easy, isn't it ? 


For more information, please get hold a copy of the Billion Dollar Whxxx. There are many fascinating details inside.

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  GoldenShares likes this.
qqq3 Icon...u are Ekovest share holder.....

In the Billion $ Whale.....we learn that Najib did not change his mind about Bandar Malaysia and Ekovest /China company......We learn that Beijing did not sign off on the deal.

there is a difference......moral of the story...Beijing is the still the smartest.....and most responsible and that is why Mahathir can negotiate with Beijing....and Ekovest? Ekovest not that smart.
24/09/2018 09:54
qqq3 Very likely Joe Low and Ekovest are business partners.
24/09/2018 09:55
qqq3 Joe Low's host in Shanghai is Greenland Chairman...this according to the book.
24/09/2018 09:57
qqq3 I may be a trader....but I have never lost a single sen to Red chips and never make a single sen from Red Chip...and I don't need the book to tell me not to play with Red Chips.
24/09/2018 10:05
paperplane Ya. AUDITOR....... Hehe hehe
24/09/2018 10:06
CharlesT Specially dedicated to KYY who now treats you as his best friend...lol
24/09/2018 10:08
qqq3 plane.....Auditors are also business men...and Joe Low attitude is there is not a single businessman ( or politician) he cannot convert.......
24/09/2018 10:09
CharlesT Maybe....maybe as at 31 Dec 2018 Xinquan still can how their cash per share of Rm1.50+ in their bank ac
24/09/2018 10:10
qqq3 too bad for sslee.
He thought he can make a lot of money following KYY into Xinquan....

but in Xinquan, KYY made the biggest mistake of his life.....

talk about luck.....lol.
24/09/2018 10:31
qqq3 charles....on hindsight, it is obvious this xinuan is a sting operation from day 1.

actually no need hindsight.....
24/09/2018 10:34
smalltimer Just found out ka??
24/09/2018 10:40
CharlesT Posted by qqq3 > Sep 24, 2018 10:34 AM | Report Abuse

charles....on hindsight, it is obvious this xinuan is a sting operation from day 1.

actually no need hindsight.....

U tell this to KYY and see whether he will give u any more tips in future
24/09/2018 10:57
Icon8888 Maxwell RM341 mil cash

Xidelang RM722 mil cash

Xingquan RM1 billion cash

China Stationery RM1.8 billion cash

24/09/2018 11:00
qqq3 charles...I ok one....I follow the wisdom....rigid is death, flexible is Life.
24/09/2018 11:04
qqq3 Posted by Icon8888 > Sep 24, 2018 11:00 AM | Report Abuse

Maxwell RM341 mil cash

Xidelang RM722 mil cash

Xingquan RM1 billion cash

China Stationery RM1.8 billion cash



so much ah?

all Joe Low school.
24/09/2018 11:05
qqq3 so when will the auditors be forced to cough out every sen they earned from 1 MDB and Red Chips?
24/09/2018 11:12
VenFx OMG, dark loops everywhere in Bursa ?
24/09/2018 12:20
pussycats oh like that kah? Jolo goto hell
24/09/2018 15:39
speakup anybody know when all this Red Chips (Xingquan, msports, etc) listed? During Tun M time? Badawi time? Najib time?
25/09/2018 11:48
hellbender the auditors in charge were negligent. Full STOP. They were supposed to do event after reporting date audit. They ought to have obtained the bank statements to proof ending balance of cash... The way the book was written was as if they used the deposit slips to proof cash inflows but not cash outflows. In cases like this it is hard not to suspect that the auditors colluded with the culprits and management of 1MDB.
25/09/2018 13:08
why_no_dividend Why Hibiscus no dividend no problem but Red chips are?
25/09/2018 13:13
qqq3 why_no_dividend > Sep 25, 2018 01:13 PM | Report Abuse

Why Hibiscus no dividend no problem but Red chips are?

not its time yet?
25/09/2018 13:15
3iii If you do not trust the management, vote with your feet.

Don't waste time on even trying to understand the business.
25/09/2018 19:37
smalltimer Its a very old trikeey...simetimes call kite flting too..
04/12/2018 07:53
5354_ How abt HRC, Hibiscus? They got pay good dividend?
04/12/2018 09:05
5354_ Red chips not listed when Najib time? No wonder he was kicked out in GE14. Got hear Pak Lah or Tun M losing in GE?
04/12/2018 09:09
KAQ4468 Maxwell RM341 mil cash

Xidelang RM722 mil cash

Xingquan RM1 billion cash

China Stationery RM1.8 billion cash

04/12/2018 09:11
rajachulan The auditor is working for the company, the banker is working for the company...the politician is working for the company...the whole mechanism is working for the company... as long as the company is paying...
04/12/2018 09:28


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