{"id":223601,"date":"2010-01-24T19:47:00","date_gmt":"2010-01-25T00:47:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/another-warning-sign-china-based-singapore-listed-firms-collapsing-amidst-debt-and-fraud-2010-1"},"modified":"2010-01-24T19:47:00","modified_gmt":"2010-01-25T00:47:00","slug":"another-warning-sign-china-based-singapore-listed-firms-rapidly-collapsing-amidst-debt-and-fraud","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/223601","title":{"rendered":"Another Warning Sign: China-Based, Singapore-Listed Firms Rapidly Collapsing Amidst Debt And Fraud"},"content":{"rendered":"

\"singapore\"<\/p>\n

Here’s a fascinating, just-out artcile in Hong Kong’s South China Morning Post<\/a> (sub req’d) about the collapse of Singapore-listed, mainland China-based firms that have collapsed amidst an inability to repay debt and fraud.<\/p>\n

Since late 2007, a spate of so-called S-chips – mainland companies listed on the Singapore exchange – have borrowed money then failed to repay the debts, with some becoming mired in fraud scandals.<\/p>\n

Of the 11 S-chips that issued convertible bonds between 2005 and 2008, six have declared themselves unable to repay. Two of those six – steel group Delong Holdings and property developer Sunshine Holdings – have successfully restructured their finances while the rest remain locked in talks with creditors.<\/p>\n

Convertible bonds are debt instruments that investors can convert into shares at a later date.<\/p>\n

Another five S-chips failed to repay bank loans during 2008-9. The effects on their share prices have been, predictably, crushing.<\/p>\n

Not surprisingly, global investment banks have been involved in pushing the S-chips’ debt onto investors<\/p>\n

In June 2008, blue-chip investment bank Morgan Stanley sold US$109 million worth of convertible bonds issued by waste recovery group Sino Environment Technologies, based in Fujian , to a group of lenders including US investment firm Stark Investments.<\/p>\n

Sino-Environment’s share price has since crashed from S$1.30 (HK$7.18) on the day it sold the convertible bonds to S$0.135 when the stock was suspended from trading in September.<\/p>\n

During that period, Sino not only defaulted on its bonds – the Singapore-listed firm is also being investigated by the city state’s Monetary Authority, a person involved in the case confirmed, after its auditors Pricewaterhouse Coopers said they could not verify the whereabouts of US$85 million of Sino-Environment’s cash.<\/p>\n

The most interesting is probably this one, which is involved in an industry where you don’t typically get a lot of publicly-traded action:<\/p>\n

The most recent S-chip bond  default came from China Milk Products Group, based in Heilongjiang, that produces bull semen and cow embryos for cattle breeders,<\/p>\n

The vast majority of the investors who bought US$150 million worth of convertible bonds China Milk sold through Deutsche Bank in December 2006 have exercised an option to get their money back, a person close to the agricultural company confirmed.<\/p>\n

China Milk’s net profit tumbled 73 per cent in the three months to last June compared to a year previously. The business was hit by last year’s tainted milk scandal on the mainland, which cut demand among dairy farmers for new livestock.<\/p>\n

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