China MediaExpress Holdings: Excuse My Continued Lack of Shock

17 Mar

When you – in this case, CV Starr and affiliated funds – buy a large chunk of a Chinese Reverse Merger company, like, oh, I dunno, China MediaExpress Holdings, and you get a board seat, perhaps you should insist your “man on the ground” is on the Audit, not Compensation committee.  And perhaps you should do a little more independent due diligence, instead of meeting management and reviewing documents they supply.    Just sayin…

Otherwise, don’t be surprised when your Auditor and CFO resign, and your board member steps down citing “in particular, irregularities in the bank account balances of CCME’s PRC subsidiaries.

What’d I say going back to February 3rd when I first got into the CCME debate (and have said since)?  Last week, to quote myself:

The CEO & mother own 80% and 20%, respectively, of the operating entity, Fujian Fenzhong Media Co (PRC), but a lower % of CCME shares.  The only way money flows to CCME from the operating entity is through what seems to be mostly questionable “contractual arrangements” (see page 22/23 of the 10-k) between the entities.  Does no one else think it was a red flag that the CEO & family own all of the operating entity IN CHINA, yet less of the supposedly effective managing entity?  If there is or was ever any money actually coming out of the operating company, where do you think it’s really going?  To CCME shareholders, or to the CEO & family?

Sure, the entire story is as-yet unwritten, but come on, does anyone still unconvinced this firm is anything but a fraud?  If there even is any money to be had – presuming it’s in CCME bank accounts in the U.S. – a big presumption – the cash, any remaining “assets,” less the stock CV Starr tries to put-back/sell (best of luck!) is probably worthless or very close to it.

 

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One Response to “China MediaExpress Holdings: Excuse My Continued Lack of Shock”

Trackbacks/Pingbacks

  1. A Sign of the Times, Perhaps, Buried in the WSJ? « Stone Street Advisors - June 30, 2011

    […] Chinese JV is in more trouble than we thought, in the wake of its involvement in frauds like CCME and Longtop.  Ordinarily, I’d simply put a call into Deloitte’s offices in Shanghai […]

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