Company is on the verge of finding new businesses for diversification. Some proposals brought forward to the management were way beyond the cash holding like one for building a mall on the land to be sold. Estimated cost Rmb 600 million vs Rmb 408 million cash in the bank.Management conserving cash in order to have the best diversification option within the company's affordability.
I was told by a financial analyst as long as the cash is proven to be real this counter should double or triple that is 7-10c.
During the EGM when I asked how if China Fibretech becomes another Foreland,The Indepnedent Director Mr Lim Yoke Hean got visibly angry for such a suggestion and told not to compare China Fibretech with Foreland. I think he was angry that we were looking at the board and management suspiciously.
Mr Lim Yoke Hean has placed his reputation at stake by vehemently defending the management about the cash money.
For the EGM he was answering most of the questions on behalf of the CEO cum Chairman,meaning to say he knows exactly what is going on in the company.
Besides,he personally regularly checks on the cash on a weekly basis by the online banking system which cannot be forged.
He is helping the company to come out with a diversification plan.In selecting and implementing.
Soon will see the result and can see the counter zoom pass 10c.
But one thing for sure I know the money is very much intact and protected because that is the question in everybody's mind n the independent directors and the Senior Finance Manager have the responsibility.
Being a financial expert, Mr Lim Yoke Hean is hands on in the vetting and selecting the right kind of investment so that there is much returns n minimal foreseeable writedown.
From my opinion when I attended the EGM, Mr Lim Yoke Hean the independent director is very much involved with the company and he is the one who is advising the company on its diversification. I think its a big plus as the independent director is supposed to be a custodian of retail investors interest as such he will make sure the cash is protected like he came with a system of checking the cash on line and rejecting some of the proposals. Unlike the China boss from the province who may have very little knowledge outside his province,Mr Lim Yoke Hean is very experienced in deal making and investments which I believe the management is tapping.
Therefore I believe the cash is safe and will be deployed according to the best practices available . If the independent director is just another independent director I will not have this much of confidence. There are many seat warming independent directors who have little knowledge about management, accounting and investment and collecting remuneration for agreeing with everything the management does.
Both the independent directors said that the best way to improve shareholder value is by soundly investing the cash holding and that will boost the share price to its intrinsic value and that's what the management and the board working on. They don't want to blindly jump into a venture for the sake of investing and blowing the money away. I am very confident Mr Lim Yoke Hean is there to guide the company through this path and I can see he really understands the company well to a point he chaired the EGM on behalf of the CEO who was also present.
Talking abt Cash at bank, I couldn't help wondering the case of Eratat whose bank confirmation was forged & even the branch coming out to deny the balances. So is it of any assurance even if one is to do online enquiry but the other side (bank, if there is collusion bet them & the forged party) confirmed it?
When you are doing online checking ,how to forge it in a top three bank.
Besides,why would the independent director who is prominent in the investment sector in singaporecome forward to tell that he is personally checking and also evaluating and rejecting many proposals.
Once a proposal had been accepted the next thing is tapping the cash. Unless the independent director is colluding with the CEO which is highly unlikely from the way he responded during the EGM no reason to doubt it as the cash is ready for deployment upon accepting a business proposal.
As I said before the CEO,the independent directors,Senior Finance Manager and the auditor have committed that the cash is real.
If the CEO has other plan for the money then they will not be looking at business proposal and the independent director will not be wasting his time vetting the proposals. Once the independent directors and management have accepted the proposals money has to be released.
Hope can you can understand the logic.
During the EGM, the retail investors vigourously scrutinised the management and the independent directors about the existence of the cash and the plan for the money.
If we had been not happy about the response I would not be writing so confidently about the cash.
Just for information we were not so kind to the management or the independent directors during the EGM.We demanded commitment and answers with supporting actions on the part of the management.
Honestly, I was not very friendly with the management and the independent directors during the EGM because I demanded for resounding answers to be followed by actions not lip service.This information I have furnished is based on scrutinising the management not accepting whatever they say. I demanded what actions taken that prove the management and board are sincere and not lip service.Made them commit and not just give excuses.Let them know exactly what the investment public think about them.We were not friendly with the board during the EGM so that we are objective not subjective.
If something goes wrong we know what to do as the independent directors who are singapore based are answerable as these matters have been brought up before and they have defended the management and they have claimed to have been on the lookout to prevent any improper behaviour.
So all of us are alert about the money,the investment public,the independent directors and the management including the CEO.
Eratat CEO ran with the money by surprise as not many suspected or questioned the CEO the way China Fibretech investors question the CEO.Every meeting the China Fibretech had to defend himself and the independent directors had to substantiate why the money is real.
In conclusion the money is safe ,the proof will be when the money is deployed in new venture.
The independent directors are to ensure everything is in proper order as they are also answerable to SGX. They cannot act blur as the retail investors have always alerted about the safety of the cash.
Based on the information from the independent director Mr Lim Yoke Hean the investment will not be a channel to siphon the money as he is personally involved in vetting the investment proposal. If they want to siphon the money they dont need to select a proposal just get a colluding party to make proposal and then siphon the money. The independent director very angrily rejected when I brought about what happened to Foreland.He was angry comparing China Fibretech with Foreland.If he is not convinced about China Fibretech why does he need to get angry?
Both Eratat CEO and his collaborators can make the $$$ disappear with staff from inside and outside the company. Have those independent directors analyzed how this is done? Do they owned any substantial shares out of their own pocket? If so, maybe they will be more responsible. So far, have you hear of any criminal proceeding brought against any independent directors/CFO from those troubled S-chip companies. Talking gungho is free and quite natural for most of these directors. They get agitated especially deemed as challenging. When things happen, all kinds of excuse or disappearing act will be seen. Frauds can be done in many unthinkable ways. I have also be bitten S-Chips before. Just careful.
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