The Millipede
13 Aug 2015
Re: Business going forward? Wildcat,FWIW I really really hope this turns out to to be a genuine business and I was not being sarcastic when I said I would like to hear the NEDs answer to your concerns.It might also be put to him that, even if the business is genuine, there is precious little evidence that the executive management team are prioritising value for shareholders.(1) Donating RMB80m to a charitable cause, an amount greater than was raised in the original listing, simply defies belief at a time when a significant part of the cash balance supposedly has been spent buying back stock.(2) Why was the stock bought back at all - severely depleting cash reserves - if such an obligation was not recognised as a liability in the accounts? (3) The share price has dropped from over £1.00 to under 5p. Explain what steps were taken, as was promised, to ensure an orderly market while seed investors were selling.I think, on balance, I am in Orchard's camp and I think the cash was never there, the accounts were made up (even, I strongly suspect, the bank teller who showed "evidence" of the account balance to the nomad) and the latest announcement is a bizarre attempt to begin to match the public statements to reality. I think there is a legitimate business here - something that was never obvious over at Naibu - but I think the numbers are not real. I would also say that even if they are (real numbers) that what has happened renders Chinese companies almost entirely uninvestable. At least a fraud might not happen at all listed Chinese firms - but this way of doing business, in which it makes sense to donate RMB80m to charity and, unnecessarily pay such a large proportion of cash over to buying back stock, suggest business practices that are so alien to our own that we can simply never understand what is going on. And, of course, if there is a role for UK based independent directors one of them must surely be to try to communicate this sort of stuff in ways we might grasp, because to be frank the latest trading update is a complete abomination, more so if genuine than if it is all make believe.I think that is really the main point I would make to the NED. If this is a fraud he has been hoodwinked. Fair enough. But if this is real he has participated in a massive and deliberate destruction of legitimate shareholder value and should be ashamed of himself.Good luck anyway. Since I am not an investor here I doubt any director will give a scooby what I think. All the best,
LoadsaDosh2
13 Aug 2015
Re: Business going forward? I have to agree with OG. If times are hard why are they giving away £8m of stock ? They never mentioned anything previously about it being 'their practice' in previous statements. You also have to ask yourself why are there no director purchases at these bombed out levels? Why no share buybacks? Why has the shareprice been a one-way dive from 120p to 4p just like NBU, CTEK, and ACE?Some countries clearly think UK punters are mugs to be taken to the cleaners, which apparently we are, assisted by incompetent or complicit brokers and regulators.
Orchard Gate
13 Aug 2015
Re: Business going forward? "You are convinced that this is yet another scam by the wicked Chinese. You could be right. But you could also be wrong."True but that doesn't mean they're equally likely possibilities. I said Naibu was a fraud and it was. I said Camkids didn't have a cash pile and - hey presto! - it doesn't.So based on the evidence we have before us (take a look at the share price graph, also) it seems much more likely to be a scam than not.To insist otherwise is just wilful naivety.
Wildcat2
12 Aug 2015
Re: Business going forward? You sound as if you are about to burst several blood vessels OG! You are convinced that this is yet another scam by the wicked Chinese. You could be right. But you could also be wrong .It could be that there's a legitimate explanation for these huge purchases from the distributors . I'll try to contact one of the NEDs next week and will hopefully get a better idea of what's been going on and whether the business is viable going forward.
Orchard Gate
12 Aug 2015
Re: Business going forward? To which can be added that if it had a contractual liability to repurchase stock the announcement would have said so (and a contingent liability should have been recognised in the accounts and wasn't).It's a fraud, plain and simple.
The Millipede
12 Aug 2015
Re: Business going forward? Wildcat,I know these are anonymous boards and you can not trust anyone but FWIW I have no short position here and never had. My previous comments really were directed at Naibu but, having had a quick look at Camkids trading updates and some other RNS's since listing I would like to make the following observations.(1) Holdings announcements have shown seed investors selling out since the listing, despite the apparent value in the shares. This is similar to the situation at Naibu and IMO points to the primary purpose of the listing being to allow Chinese investors to transfer their cash into sterling. (2) The listing raised a relatively small amount of money (£6m) at a time when the company was already apparently cash generative and allegedly already had cash reserves of around £13m. What was the money needed for? What was it spent on? Neither is clear.(3) The latest trading update claimed that, in line with previous years, the company was donating the equivalent of £8m to poor children. In no previous trading update, from listing at the end of 2012, has such kindness been mentioned. In other words, this act is totally out of line with previous years and comes at a time when the company has spent almost all the remaining cash and so could do with some spare.(4) Recently the company has noted the cash balance implies a 350% upside to the share price. Presumably, now the cash is gone, and trading conditions have deteriorated, and continue to do so, the company would agree the current price reflects fair value.I would be interested to hear what the NEDs have to say about all this, in particular about how a strategy that involves spending most of the cash - and then for good measure giving a substantial sum (more than the sum raised in the original listing) to charity - could possibly make sense as trading conditions fail to meet expectations.
Orchard Gate
12 Aug 2015
Re: Business going forward? "these large payments are more likely to be contract-driven"And people wonder how these scams can happen.Let me try and explain, Wildcat. For some time now people have been suggesting or stating than CamKids is a fraud and doesn't have the big cash pile it purported to have. On the other hand people could point to the company's statements and the audited accounts and say "but look, there .... there it says they do have a big cash mountain". So two schools of thought.Then the company passed the dividend to "preserve cash" for expansion, even though a maintained dividend would have left 96% of the supposed cash balances in tact. Now at this point most sane people and even Loadsadosh and Simon Thompson smelt a rat and began to say the first school of thought - it's a fraud - looked like they were correct.But how to explain the claimed cash mountain? Well, then the company issues the latest hilarious statement with a whole series of preposterous reasons why the cash has all gone (including non cash items like giving stock away to poor children).So, hey presto! Those who said the company had no cash and the company itself are now aligned, as indeed there is no cash, the only debate being whether it ever actually existed.Now if you don't think this is all a bit fishy, if you don't think this has "SCAM" written all over it in nice communist party red then I don't think there is much I or anyone else can do for you and you are destined not only to lose your investment in this fraud but probably in others too because frauds rely on there being just enough gullible fools for them to get the money and run.
Wildcat2
12 Aug 2015
Re: Business going forward? You could be right that it's a scam, but these large payments are more likely to be contract-driven, I think.I'll try to contact the NEDs next week (currently on holiday) and will get a better picture.I can see that the whole thing is a gift to the 'all Chinese are con- men' brigade, who conveniently have short positions.
LoadsaDosh2
12 Aug 2015
Re: Business going forward? What?? You believe the trading update? Surely you can see it for what it is now i.e. a money-laundering scam?
Wildcat2
12 Aug 2015
Business going forward? What a dreadful trading update, by any standards. Such huge sums involved in re-purchasing old stock. Seems incomprehensible but presumably the company has daft contracts in place with these distributors which obliges them to do this. These contracts were probably written in the boom times when recession seemed impossible. Not easy to see an upside here, but it does sound as though there is still a functioning business here, if a much smaller and less cash-rich one. Personally I'm going to hang on to my shares, though I'm 90% down. It was not a big position, and it's a very small one now.
LoadsaDosh2
12 Aug 2015
Re: here is a question Fair enough OG but why can't the brokers, Nomad, and AIM regulatory authorities see that or do they turn a blind eye too?
Orchard Gate
12 Aug 2015
Re: here is a question Investors should be sceptics in all cases. When it comes to Chinese companies, they should be particularly sceptical. Of course some dullards will suggest that this is racist. That's because they don't know what they're talking about and have never done business in China. I have and it is simply a fact that their standards are different to those in major developed markets such as the UK, especially when they are dealing with "round eyes" who they don't trust.Anthony Bolton said exactly the same thing and he should know.Investors should also be sceptical when a business based in and with all or almost all of its operations and other country chooses to list in a different country. This is true for US companies which list in the UK just as much as Chinese companies.But when you have the combination of a Chinese company, controlled by Chinese shareholders, managed by Chinese directors and operations based entirely in China this in itself should be a massive red flag (appropriate for China!). The only reason for such companies to list in London is to raise money from naïve Westerners, keep the plates spinning for a while and then fold the operation and keep the money, safe in the knowledge that the Chinese authorities will do nothing against these fraudsters because they believe that ripping off Westerners is part of the game and if we are stupid enough to give them money we deserved to lose it.
one4all
12 Aug 2015
how come this isnt less than 1p yet? probably because the major share holder has so many
The Millipede
12 Aug 2015
Re: here is a question FWIW I do not think the fraud was obvious from the outset and we need to remember that, now it HAS become obvious, we are speaking with a large dose of hindsight. I thought NBU and CAM probably were frauds and I thought even if not that the shares were not cheap. I thought also that value for shareholders was not top priority for management. Three good reasons not to invest but nothing was certain.I agree with you though that brokers and nomads need to be more careful. After recent events, some should be struck off - and if that is not possible it tells you all you need to know about their likely integrity. They should, at an absolute minimum, be required to visit the company and see its operations. And, probably, be fluent in the language of company directors. These should be mandated minimum legal requirements. If Chinese companies develop a reputation as cons then I think they should be banned from the market - especially if, as is likely, their reason for listing is solely for wealthy Chinese to get their cash out of China and into the west. In effect, money laundering. IMVHO this motivation has been clear for some time.Equally, I think we (small investors) need to be less credulous. A listing implies nothing. A broker's report on any AIM stock is likely to be nothing more than advertorial. FWIW. BWTFDIK
LoadsaDosh2
12 Aug 2015
Re: here is a question Yes I can understand IC not delving too deeply but surely the brokers/Nomad/AIM authorities could have worked out it was a fraud if it is as clear a fraud from the outset as you make it sound? The fact they didn't and failed miserably either though incompetence or conivance should, in an ideal world, give investors some cause for compensation.
