Wednesday, February 25, 2009

The State giveth...and the State taketh away...

Hey...remember this guy?

HONG KONG (MarketWatch) -- Mystery surrounded the whereabouts of Huang Guangyu, one of China's wealthiest individuals, a day after reports surfaced that he was recently detained by the Beijing police for questioning over alleged financial wrongdoing.
Well, he's sort of found...sort of.

Three months later, Huang and his wife and former co- director, Lisa Du Juan, remain incommunicado, along with Zhou Yafei, Gome’s former chief financial officer, somewhere in China’s penal system, leaving Greaves and his remaining co- directors scrambling to avert the company’s collapse.
Apparently, he is under investigation for share manipulation. The details are a bit sketchy.'s China's problem...not ours...right?

Gome’s investors -- which include Capital Research & Management, a unit of Capital Group Cos., the largest U.S. manager of stock and bond mutual funds; Warburg Pincus LLC; and clients of JPMorgan Chase & Co. and Morgan Stanley -- still can’t trade the suspended stock. All four fund managers declined to comment.
Curious...and it might not pass the smell test. How much have these US firm invested in the now nosediving Gome? I'd bet a bit more than "a little" since they're refusing to comment.

After Huang disappeared, Xinhua reported that he was suspected of having manipulated trading in shares of two other companies, Beijing Centergate Technologies (Holding) Co. and Sanlian Commercial Co.

Xinhua also reported in January that two investigators from China’s public security ministry had been detained for allegedly taking bribes during the investigation into Huang.

Other than that, Chinese authorities have released no details of the allegations against him.

Alarmed that Gome could collapse without its founders, the remaining directors set up an action committee headed by Sun. They also called in a forensic auditing team from Ernst & Young LLP to investigate any irregular transactions.

Greaves says nothing has been found so far. “When people do get taken in for questioning, they sometimes disappear for months or even years,” Greaves says. “That creates uncertainty, which is the worst thing for institutional shareholders, especially when the rest of their world is crumbling around them.”
Where's the outrage from our "Close GITMO" folks?