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I suspect it is a fraud a few months ago, but recently the insider buys and CEO's share conversion seems to imply that I was wrong.

I am worried about the corporate structure. Given it is a Seattle based company, there might be less likelyhood for the illegal asset transfer.

i never once mentioned LLEN to be a solid investment, part of my doing DD is finding informations and sharing it, and see what's people's opinion on it. 

the writer does not make any wild assumption in mentioning LLEN as a potential buyout, since coal industry is consolidating, and if it is indeed legit, it's currently at 30% of previous high

Well......... The next article says that PUDA has a high probability of LBO, so LLEN must be good too. I strongly doubt if this is a low level stock promoter with no real thinking.

If PUDA chairman really has the money for the buyout, why would he sell half of the company to CITIC and pledge the other half for a 14% interest loan? Clearly, he has no money, so there is zero possibility of LBO. Therefore I think this guy wants to promote LLEN beyond normal logic. At least, his mention of PUDA makes feel like I don't want to read any more of his ariticles.

In addition, LLEN's 51 job postings don't mean anything. CCME also had a bunch of 51 job postings after they were halted.

I think a lot of DD has to be done before you say this is a solid investment. I am not saying this is bad because I have not done any real DD yet. I just want to say this stock promoter sucks and don't trust any of his articles.

nice article on LLEN

 

http://www.staranalystonline.com/search/label/LLEN

whitetiger, it's a pleasure to be able to speak with you! Unfortunately, the last time we had a discourse the entire group of threads was deleted off of IHub for some reason.

Thank you for the response, and, of  course, you can call me Wang or kobe1. Please, feel free to choose for yourself. Would it be OK if I called you Maj?

The question I was asking didn't have anything to do with the Kim Fai acquisition, it had to do with New Energy's SAIC filings. You have stated in another post, "Now,I do believe that, going forward, companies will find ways to have SAIC match SEC, especially the ones that were only committing tax fraud, that are well connected or operate in areas where SAIC agencies struggle with inefficiencies (such as New Energy Systems (NEWN))."  I was hoping that you could explain what, specifically, New Energy Systems is doing that is fraudulent in this area.

Plus, would you please respond to my question regarding the trading in phantom shares, which is rampant with New Energy: should individuals who engage in the illegal trading of phantom shares be prosecuted for this crime?

Also, is it true that you are offering, for $25,000, the opportunity for individuals to learn how to attack and destroy the value of US-listed Chinese equities?

And, how do you respond to the allegations that Dan David (an individual with a large amount of responsibility at Geo) actually just manages a few Dollar Stores and drives a limo on the weekend?

In addition, I'm not sure if you're aware of this, but on Yahoo I have raised the question of Bob, your PRC attorney. You have a very high regard for this individual, and have placed a lot of trust in his ability to perform his legal functions here in China. Since he is, apparently, one of China's top attorneys, would you please supply us with his real name and other information that could be used to verify his credentials? A number of people here in China are curious to find out more information about an individual who is being employed by a US hedge fund to attack Chinese companies.

Plus, out of curiosity, why have almost all of the NEWN threads on Geo been deleted? I was looking for some that had previously been posted but couldn't find them.

I have many more questions, but I don't want to overload you at this time.

Thanks for your kind attention!

Maj, would you please add some color to how New Energy is committing fraud? Is it because they are well connected or is it because SAIC agencies struggle with inefficiencies? Plus, would you please go into more detail about how New Energy is a fraud in this arena? What is New Energy doing to lie to the SAIC that the SAIC is unable to find out on their own that you have been able to determine? Thanks!

That works for me but your other comments would lead me to believe otherwise.  I am not trying to deny their auditor is Kabani at the moment.  Given their audit committee is working on upgrading to top 6 firm they are doing what investors are asking for - i am fine with it being done right even if it takes a bit extra.  Pretty sure Andy Leitch who ran Deliottes Asian practice is going to make the right decision as well as Ian who was a partner at E&Y.  Ultimately i hope shorts keep pounding on them as i believe that is actually a good thing for longs who have a longer term approach. What i find tacky and don't like is people making mudslinging accusations based on baseless statements to try to influence stock price based on these statements with no factual due diligence.  Ultimately the short interest is a positive for me in this particular situation and hope they keep coming as will be interesting when they change auditors, ship their first shipment from Bowie, continue to execute and expand their mines in china.  Given the next 5 year plan in china the coal market will see huge changes.  Should be fun to watch regardless. 

Andy,, Understood. But know that I am not attempting to spread false allegations.

• fact: Kabani is the auditor which lends to perception risk and investors need to know this.
• fact: The shorts will keep pounding this name
• fact: at this time I am mainly basing my opinion on where the stock may go due to investor perception

I will admit that when i ponder  the L & L Energy (NASDAQ:LLEN) story, I have a hard time believing it is not a legitimate operation. Hopefully, further DD will confirm this thought.

Maj - i am not asking you to invest nor has my intention been to try to get you to invest.  That is not my purpose of posting.  My purpose of posting is that you were trying to spread false allegations that i viewed as mudslinging and tacky.  I don't find it funny that investors lost money.  I made money shorting names as well but in Australia i lost money in the past as well and thats part of investing at times.  Most of my investing historically was in Australia until about three years ago when pouched a team from a Chinese private equity firm.  i believe everyone should do on the ground due diligence, audit work and legal checks.  With regards to L&L I agree they need to upgrade from Kabani, but i also have faith in Andy and Ian to ensure they pick the best partner for the long term.  Given the company hasn't diluted shareholders and has used its cash from operations to build assets that are verifiable that makes me happy versus what most of these companies are doing - which is why i started my due diligence on the company initially.  Companies i target for shorts are the ones where they sit there with $70 million in the bank and trade at 3 times earnings and then raise more money with no identified purpose or desire to use internal cf.

my answer to your question is no.  I do not invest unless i can verify the business on the ground and over time. 

Andy. You really think that all our work is based solely on documents?  We do in fact  have a team  on the ground in China. Now sometimes, such as in the case of Puda Coal (OOTC:PUDA), Lotus Pharmaceuticals (OOTC:LTUS) and China Redstone Group (OOTC:CGPI) all you need is documents. In the case of L & L Energy (NASDAQ:LLEN), more is eventually needed.

I am glad that you find our research pieces amusing. Not sure i find it amusing that many firms laughed all the way to the bank, leaving U.S. investors holding the bag.  

You are long L & L Energy (NASDAQ:LLEN) now and that is great for you. And this is due to your OTGDD.   Respect that I will only go long as a non-trade investment  once my DD is complete (if positive).  Respect my opinion that I do not yet have faith in Kabani.  

Would you buy a China RTO right now without OTGDD?

You have the right do whatever you want.  I also have the right to say your statements are baseless and factually wrong.  Which is why i commented as i had a better opinion of this site at the time.  Its cool that your work is reliant upon a business commerce filing, i just prefer to dig a bit deeper on the ground, understanding you follow many companies and I only follow three or four at a time during my due diligence process.

I don't need to justify the work i have done with you, as i am very comfortable based on last six months the work we have done at my family office and our team in china and hired service providers.  I don't really care to share my work nor put it out in amusing "research pieces" as we invest money for a living.  Personally i am actually fine with people shorting positions i own, just find baseless allegations as tacky. 

I know that Kabani has been on-site of LLEN. Hate to say it, but looks like Kabani (the devil!) has a more coherent opinion of LLEN than you.... Can't vouch for the quality of their work, but then again, I'm not a PCAOB auditor.

I can't respect your opinion of LLEN since (like you claim with Kabani), you have yet to do your "OTGDD" either. You are no better than they are. In fact, I'd say your opinion means less, since I know for sure they have done their OTGDD, and you're just sitting back here behind a computer. I give very little value to your thoughts on LLEN.

You say: "What I find mindless and egregious is that a company of L & L Energy (NASDAQ:LLEN) size goes so long without upgrading from Kabani. Just plain ignorant." That is a pretty ignorant comment in of itself. It's like saying Google is a potential scam only because they still use E&Y, while E&Y was part of the LEH scam. There have been *no* problems with LLEN's numbers. Furthermore, they have publicly stated that they are looking to upgrade auditors. I can imagine that getting a Big-6 auditor hired has got to be a monumental effort in this day and age - the due diligence is probably 10x more than in the past. So.....it takes time. Using that argument is pretty weak on your part and goes squarely against (contradicts) your argument in your paragraph directly above that ("Correct me if I am wrong, but being a U.S, citizen has not prevented individuals from defrauding investors in the past."). Finally, I think the point Andy made about management being US citizens is the point out the fact that they are subject to US laws, hence their incentive to committ fraud is less than if they were soley in China.

I will admit that I have not performed OTGDD, except for retrieving the filings. As for related party transactions.. sure, they disclosed them, but I reserve the right to scrutinize information in filings.

Your argument that ...

• L&L management are US citizens and so is board.  You can sue them unlike other Chinese companies and they can go to jail in U.

is garbage..

Correct me if I am wrong, but being a U.S, citizen has not prevented individuals from defrauding investors in the past. Oh.. and neither has greed.

I am sorry that you find my thoughts as mudslinging and baseless .  What I find mindless and egregious is that a company of L & L Energy (NASDAQ:LLEN) size goes so long without upgrading from Kabani.  Just plain ignorant.

To be fair, if you have performed hours of OTGDD,  then you are a steps ahead of me on this one and  I am willing to listen. Care to share your OTGDD?  I will have no problem going long this stock.  Remember, I am not saying LLEN is a fraud... Yet

 

implying is same as making accusations.

Related party loans are disclosed as required and they make sense.  Hiding margin assumption is garbage - ie. tian-ri is developmental so what margin are they hiding?

L&L management are US citizens and so is board.  You can sue them unlike other Chinese companies and they can go to jail in U.S.  Ultimately based on weeks of on the ground due diligence i believe they are building a nice business.  Obviously they need to grow and continually upgrade al aspects of their business as they expand.  Their audit committee, which is very solid is working on auditor now.  This is also per sarbox and this board is clearly better than any other Chinese company - even the IPO's from big banks. 

While appreciate all sides to a story I find you accusations as mudslinging and baseless. I am short more positions than i am long in china (only long 2 as my team does a lot more work on the long calls).

Andy, I have not made accusations.. only vague suspicions. All I said is that Kabani is the auditor and that they have some related party transactions. Now, I know they have announced that they will upgrade the auditor. But we have seen many of these announcements eventually not work in favor of companies. As far as picking up the phone, i now prefer to perform the brunt of my DD independent of the company.  I will say that I have not heard a great short thesis against L & L Energy (NASDAQ:LLEN) yet.

Andy.. I am not an auditor.  I am aware that many companies purchase fake "audited" financial statements to present to the SAIC. For an FIE, the same info is provided to the SAIC and SAT in an annual joint inspection. That is why SAIC = SAT for the companies where i have both filings. Read Liandi Clean Tech (OTCCB:LNDT) and Gulf Resources (NASDAQ:GFRE) filings and you will see more about the joint inspection process for an FIE.  So when an FIE purchases a fake audit, it is defrauding the SAT.

Now,I do believe that, going forward, companies will find ways to have SAIC match SEC, especially the ones that were only committing tax fraud, that are well connected or operate in areas where SAIC agencies struggle with inefficiencies (such as New Energy Systems (AMEX:NEWN)).  That is why the most important part of our DD needs to be on the ground and focusing on other items in the SAIC besides the numbers. Notice that our pieces on Lotus Pharmaceuticals (OOTC:LTUS) Subaye (OOTC:SBAY) Puda Coal (OOTC:PUDA) China Redstone Group (OOTC:CGPI) relied on granular details in SAIC filings other than the numbers.

As far as companies providing me with SAT filings? I will not trust anything these companies give me. Now let me know if they allow you to view the SAT docs directly at the SAT agency like Deloitte did, who discovered that docs at the agency differed materially than those provided to them by the company.

Also let me know why, when comparing a company's SAIC docs ( China Kangtai Cactus Bio (OOTC:CKGT)) from year to year, the numbers follow a logical pattern.  Also tell me why China Integrated Energy (OOTC:CBEH) revenues on SAIC filngs match, while its net income do not match.

In this case particularly review the structures on their investment.  Since I have been told you used to be on their website i am sure you could pick up the phone before making accusations.....  I am sure you take your time to do all that as you are piling through the business commerce filiings....

Maj - i wasn't aware that you are the "auditor" auditing the SAIC files.  As a matter of actuality SAIC files are 100% not audited and often not even submitted by the Company.  They are a business commerce filing.  Most companies have agents that file them for them.  Similar to most businesses here use delaware or nevada agents to file their commerce filings. SAT files are audited by the tax authority.  Yes some times they match, but if the SAIC files matches complete i would call BS.   Chinese GAAP operates under cash accounting whereby US operate under accrual. Also timing of fiscal year versus tax year, reviewing all the subs, and ensuring structure is operating on FIE, VIE, partnership or JV effects these items.  

The funny thing is most companies will provide you access to the SAT files if you sign a non disclosure and call them.  I do this every time prior to when I invest its not that hard to do.

Reliance purely on SAIC files is going to cause people a lof of headache and is a fad due to its inaccuracy.  Also will be amusing when the complete matches go down for being frauds because the financials in a SAIC filing means nothing, the SAIC filing is used to ensure they have licenses and are operating not to audit financials.  Companies could put whatever they want in here and be fine. 

Andy.. Many SAIC filings are audited. Have you accessed SAIC filings? Because I have a pile of about 70.  Every FIE where I have SAIC and SAT match. SAIC filings do matter.