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News » Society » 7 confirmed dead in Shanxi mine flood |
- 7 confirmed dead in Shanxi mine flood
- 9 Chinese sailors missing in boat sinking off South Korean waters
- The over-27s China calls 'leftover women'
- China's armed forces not involved in cyber attacks
- Microblogs with the scoops ...
- Dog photos spark concern for lab animals' welfare
- Rescuers drain landslide lake
- She hit me, says boss of 'Crazy English'
- Quake damages nearly 900 houses in Yunnan
- 39 punished for toxic chemical leak in Shanxi
- US will change visa procedure
- Two Tibetan youths 'self-immolate'
- Muddy Waters Secret China Weapon Is on SEC Website
- Deloitte sued over audits of ChinaCast Education
- Have You Heard…
- China’s Truman-Style Resource Quest Tests UN Law and Neighbors
- U.S., China Ties Tested in Cyberspace
- Buying fake walnuts in China (photos)
- Visa application made easier, cheaper
- Man held for gruesome attack on parents
| 7 confirmed dead in Shanxi mine flood Posted: 20 Feb 2013 07:30 PM PST SEVEN men have been confirmed dead after being trapped underground for more than 40 hours in a coal mine flood in north China's Shanxi Province, the local government said today. The accident happened at about 4 am on Tuesday in Yangquan, where 12 people illegally dug a mine pit in a residential building. Six of the 12 managed to escape the flood. A preliminary investigation showed another six people were excavating coal in a connected pit nearby when the flood occurred. One man from this group was trapped underground. Rescuers had pumped more than 12,000 cubic meters of water out of the pits by the time they wrapped up their work. Liu Xianyun, a production safety official in the city of Yangquan, said the pits' owner tried to escape instead of reporting the accident immediately to the local government. He said police have detained the main suspects in the illegal mining operations. Related government departments are making a geological survey of the area and looking for hidden dangers in order to avoid secondary disasters, said Liu. The mine pits are located in residential areas and are close to a special railway for coal transportation. The government of Yangquan has initiated a campaign to discourage illegal mining. The government is investigating related cases and encouraging local residents to report illegal mining operations. |
| 9 Chinese sailors missing in boat sinking off South Korean waters Posted: 20 Feb 2013 06:49 PM PST A fish-carrying vessel of Cambodian nationality sank off waters in Ulleung Island of South Korea, leaving 12 people missing including nine Chinese sailors, the Yonhap News Agency reported citing the relevant authorities. The South Korean Coast Guard received a request for rescue around 7:04 am local time today from the Cambodian-flagged, 296-ton boat that carried nine Chinese and three South Korean sailors. At that time, the boat was located 548 km northeast of Ulleung Island of South Korea on the East Sea. The South Korean coast guard dispatched four ships and four patrol planes to search for the missing sailors, while asking the Japanese and Russian authorities to help with the rescue operation. The Japanese authorities sent two patrol ships and two plans to search for the sailors. The authorities have yet to identify the cause of the sinking and whether the sailors were alive or dead. |
| The over-27s China calls 'leftover women' Posted: 20 Feb 2013 04:35 PM PST Over 27? Unmarried? Female? If you're in China, that means you risk being labelled a "leftover woman" by the state, reports Mary Kay Magistad. |
| China's armed forces not involved in cyber attacks Posted: 20 Feb 2013 09:03 AM PST CHINA'S armed forces have never backed any hacking activities, a military spokesman said yesterday as he denounced a US cyber security report. China bans activities that disrupt cyber security and the Chinese government always cracks down on cyber crimes, defense ministry spokesman Geng Yansheng said. On Monday, US cyber security firm Mandiant released a report alleging that a secret military unit in Shanghai was behind years of cyber attacks against US companies. Geng said Mandiant's report had concluded the attacks came from China simply because they were linked to IP addresses based in China. But he said it was common knowledge that hacking attacks involved the theft of IP addresses. This was something that "happens almost every day." Cyber attacks were transnational, anonymous and deceptive with their source often difficult to identify, Geng said. China was a major victim of cyber attacks, he said, with military end users frequently coming under attack from abroad. Source IP addresses suggested the majority came from the US. "But we do not point fingers at the United States based on the above-mentioned findings," Geng said. Geng said China would like to resolve issues through joint law enforcement and consultations with other countries. The Ministry of Public Security had assisted more than 50 countries and regions in investigating some 1,100 cases of cyber crime since 2004, and China had established bilateral law enforcement cooperation with more than 30 nations and regions, including the US, Britain, Germany and Russia. Lodging one-sided media accusations will not help solve problems, but only jeopardize existing cooperation, he said. Jin Canrong, an American studies expert at Renmin University of China, said the motive behind the hacking claims was to seek an upper hand in Sino-US relations. With the US losing its traditional superiority, Jin said, it had fewer cards to play with, but accusing China of cyber attacks had become a new one. The US military feared budget cuts and were whipping up fear about new threats such as cyber attacks from China, particularly when traditional security threats looked less daunting, Jin said. He also said that the US government was under pressure from the business world with many US companies, keenly aware of the competition from China, concerned about losing their core technologies and assuming, unduly, that China was stealing from them. |
| Microblogs with the scoops ... Posted: 20 Feb 2013 09:03 AM PST
Entries on the "Xuexifensituan" ("Learning from Xi Fan Club") account are often written in a tabloid style, with brief, declarative statements tracing the movements of the Party chief. The posts on weibo.com appear to contain exclusive material and always come out ahead of official media reports. On February 10, a 28-year-old interior decorator in Wuxi, Jiangsu Province, revealed he was the man behind "Xuexifensituan." He refused to disclose any more personal information at the time, but promised a public interview as early as today. The microblog has attracted almost a million followers since it began in November. Meanwhile, the microblog's popularity has given rise to other accounts devoted to news and information on top leaders, including personal details usually withheld from the public. Among them is "Xianglixuexi" ("Learning from Li"), a Weibo account about Vice Premier Li Keqiang, which yesterday alone attracted more than 2,700 followers, bringing the total number of followers to above 12,700 as of last night. Various pieces of information regarding the vice premier have been posted on the microblog, including samples of his handwriting, rarely seen photos that go all the way back to his childhood and a picture of the latest book by Cheng Hong, his English professor wife. She is referred to as "Sister Cheng" and one entry has details of her educational background. The microblog relays some of Li's off-the-cuff quotes and showcases the moments when he seems most accessible. During Li's inspection tour of Enshi, Hubei Province, he stopped by a clothes shop and inquired about the taxes and fees the owner had to pay. When the owner tried to downplay his financial burden, Li said, according to one entry: "I am not your tax officer, you can tell me the truth." After a young boy unwittingly rose to fame for appearing half naked in a news broadcast while Li was visiting his home, the vice premier was praised for breaking from tradition and carrying out truly unplanned inspections. "Xianglixuexi" later posted some of the little boy's personal information and a photo of him and his family to wish readers a Happy New Year. A woman from Beijing is behind the microblog. In an interview with the Beijing Times, she chose not to reveal her identity, saying her background didn't matter, what did was the public response. She said she started the account in response to people's expectations for the new leaders' governance styles. She said several moves following the election of the new leadership, such as efforts to publicize their personal stories, had raised hopes the top leaders would launch their own microblogs. Wang Yukai, a professor with the Chinese Academy of Governance, said the emergence of such fan clubs showed that the public approved of the new leadership. |
| Dog photos spark concern for lab animals' welfare Posted: 20 Feb 2013 09:02 AM PST A SET of photographs depicting two mistreated dogs has sparked concern for the welfare of laboratory animals in China. The two scrawny dogs had been left with no water or food in a locked room at Nanchang University, with dozens of dead rats in cages as their only company, according to a woman surnamed Yin who fed the dogs after discovering them. She said one dog's teeth had all been pulled out, while the other was seriously injured from being tied up too tightly. Netizens expressed outrage after the pictures were posted online. "We should respect life when striving for scientific advances," was one comment while another read: "Laboratory animals have helped mankind a lot, so we should care for them in return. They deserve to live a cozy life." Hong Yijiang, director of Nanchang University's Biological Sciences Department, said the department hadn't carried out experiments with dogs for years. "They may be stray dogs that were seeking shelter," he said but admitted the room where the dogs were found used to house laboratory animals. Zhang Beibei, director of the Nanchang Small Animal Protection Association, said that even if the dogs were not kept for experiments, the public should still protect laboratory animals' welfare. Animal experiments cannot be completely abolished, said Liao Kan, a researcher at the Shanghai Institutes for Biological Sciences. He said about 15 million animals were used in scientific research in China each year. Wu Xiaohong, of the Animals Asia Foundation, said scientists should follow the "3 Rs" principle - reducing the number of animals used, refining their methodology and replacing animal experimentation with other methods. Many institutions and researchers do respect their animals. At the Shanghai organization's laboratory animal center, researchers have set up a memorial to all the animals that have died for scientific research. And medical students at Xi'an Jiaotong University pay their respects to experimental animals with bouquets every year. A draft of China's first comprehensive animal welfare law - the China Animal Protection Law - was issued in September 2009. It has yet to become law. |
| Posted: 20 Feb 2013 09:02 AM PST Rescue workers unload pipes to pump water from a barrier lake created by a landslide in Kaili City, Guizhou Province, yesterday. The water level in the lake, which flooded several houses at the foot of the mountain, dropped about 1.5 meters after 20 pumps were started. About 80 villagers have been evacuated. The landslide on Monday buried five people, and all are feared dead. This posting includes an audio/video/photo media file: Download Now |
| She hit me, says boss of 'Crazy English' Posted: 20 Feb 2013 08:27 AM PST "CRAZY English" founder Li Yang, whose wife divorced him because of domestic violence, is now accusing her of abusing him. Lodging an appeal against a court ruling that he pay American Kim Lee 12 million yuan (US$1.9 million) plus 50,000 yuan for psychological trauma, Li said his ex-wife sometimes beat him first, locked him outside for hours at night, deleted his computer files, dumped his books and documents in a pool, and threw food at him while he was giving a lecture. Li wants the court to check whether his ex-wife had psychological problems which would explain her behavior. Chaoyang District People's Court in Beijing accepted Li's appeal on Monday, the final day of a 15-day grace period, China National Radio reported yesterday. On February 3, the court granted a divorce because of the violence Lee had suffered and gave her custody of the couple's daughters, aged 10, 6 and 4. Li must pay 100,000 yuan a year for each child until they reach the age of 18. Lee had previously uploaded pictures showing injuries, including a bleeding left ear, swollen forehead and bruised knees, she said had been caused by her husband. She became something of a folk hero for China's battered wives after her story went viral online. In his appeal, Li said the couple's 2005 marriage in the United States was invalid as he was still married to his first wife. The official marriage was in the southern city of Guangzhou in July 2010. Most of the family wealth was made before the wedding so Lee shouldn't have been given such a large sum, he said. Li is also asking the court to let him raise his three daughters, who are attending an international school in Beijing. His ex-wife had no stable income, he said, and could not afford the cost of their education. He also said the girls would be better able to study the Chinese culture by staying with him. Li became famous for creating "Crazy English," a method of shouting out words and phrases to memorize and practice the language. He claims to have taught millions to speak English since the early 1990s. He once said he married Lee not out of love but to research American child-raising techniques. Li even claimed that wife-beating was normal in China. |
| Quake damages nearly 900 houses in Yunnan Posted: 20 Feb 2013 08:25 AM PST AN earthquake jolted Yunnan Province yesterday afternoon, damaging nearly 900 houses and affecting the lives of more than 5,000 people. The earthquake with a magnitude of 4.8 hit Mojiang Hani Autonomous County at 1:01pm. Its epicenter was 5 kilometers below the earth's surface, according to the China Earthquake Networks Center. People in Mojiang said they felt the earthquake strongly. One individual said he saw a television set and water dispenser shake on the second floor of his office building when the earthquake occurred. He added that he and his colleagues immediately ran out of the office building. The county's publicity authorities said the tremor toppled 10 houses and damaged 880 others, affecting 5,016 people. The earthquake came shortly after a string of tremors hit south and southwest China during the past two days. A 4.9-magnitude quake, which occurred at 10:46am on Tuesday with an epicenter 6 kilometers below the earth's surface, toppled 72 houses and damaged 949 others in Yunnan's Qiaojia County. Eight people were injured, including two who are in a serious condition. Neighboring Sichuan Province was also hit by two earthquakes with magnitudes of 4.5 and 4.7 on Tuesday. In addition, a 4.1-magnitude quake hit south China's Guangxi Zhuang Autonomous Region early yesterday morning. No casualties were reported. On Tuesday, a seismic official with the China Earthquake Administration said the central government is planning to build a national earthquake monitoring and warning system in five years. While the system wouldn't be able to predict earthquakes, it would be able to detect quakes and notify people within seconds before seismic waves hit them, said the official who requested anonymity. The project includes the establishment of some 5,000 stations across the country and will require an investment of 2 billion yuan (US$320.4 million), according to the official. |
| 39 punished for toxic chemical leak in Shanxi Posted: 20 Feb 2013 08:25 AM PST THIRTY-NINE people have been punished after a chemical leak contaminated a river in north China's Shanxi Province last month, a task force that is responsible for addressing the incident said yesterday. An investigation by the task force found Tianji Coal Chemical Industry Group in Changzhi City, which is responsible for the leak, and some Changzhi government departments were to blame for the serious contamination. Zhao Junyi, an official with Changzhi environmental monitoring department, Huangpu Shouyi, director of the environmental protection department of Tianji, and three others have been transferred to judicial organs. Twenty-four managers with the company who were responsible for supervision have been given Communist Party of China and administrative disciplinary sanctions. Nine local officials, including Pan Xianzhang, vice mayor of Changzhi, Shen Xufeng, director of the Changzhi Municipal Environmental Protection Bureau and Yang Fujin, the director of the Changzhi Municipal Work Safety Supervision Bureau, have also received Party and administrative disciplinary sanctions. Shen and Yang were also removed from their posts. In addition, Zhang Bao, mayor of Changzhi, was sacked as a result of the contamination. Meanwhile, the investigation revealed the immediate cause of the leak was due to a poor-quality metal hose that was made by a Beijing-based company in a chemical plant owned by Tianji Coal Chemical Industry Group. According to previous reports, an initial investigation had revealed that a loose drainage valve in the plant was to blame for the leak. The December 31 leak of about 9 tons of aniline into a river in Changzhi contaminated downstream water in neighboring Henan and Hebei provinces, resulting in water supply problems. Changzhi authorities delayed reporting the leak for six days. |
| Posted: 20 Feb 2013 08:24 AM PST THE United States is changing its visa application system in China starting on March 16 to make it a little cheaper and more convenient. Beginning on March 16, applicants will only pay the visa processing fee of US$160 for most non-immigrant visa types, according to the US Embassy's website. Previously, applicants also had to pay to book appointments and arrange for the return of their passports, the website said. Applicants will have the option to pay online using any debit card issued in China or a credit card issued abroad, the website said. Applicants will also be able to use a new online system to make visa interview appointments and to check the status of their applications. They will be able to call the new Call Center to make an appointment or have questions answered at no extra charge. In the past, applicants needed to pay to inquire about visa procedures when contacting the Call Center, according to the website. Under the new appointment process, the US Embassy and Consulates will continue to offer a drop-off non-immigrant visa renewal service for most applicants who are eligible to renew their visas without a personal interview. "The wait time to get your appointment throughout China on average is two to four days right now," Gary Locke, the US ambassador to China, said yesterday at a press conference in Beijing. "That's a significant drop." In 2012, the US Mission in China processed more than 1.34 million non-immigrant visa applications, an increase of 34 percent from 2011. |
| Two Tibetan youths 'self-immolate' Posted: 20 Feb 2013 09:46 AM PST Two Tibetan youths, aged 17 and 18, have burned themselves to death in protest in western China, reports from activists and Tibetan exiles say. |
| Muddy Waters Secret China Weapon Is on SEC Website Posted: 20 Feb 2013 08:27 AM PST  Source: Bloomberg News By Linda Sandler Muddy Waters LLC, whose analyst reports triggered $7 billion in losses for Chinese stocks, used an unlikely secret weapon for its research: the public website of the U.S. Securities and Exchange Commission. "The CorpFin accountants do a good job of spotting issues in the companies' filings," said Block, co-author of "Doing Business in China for Dummies." "We've read some astute questions from CorpFin on a range of issues." Informed by such correspondence, the research firm's 2010 report on Chinese waste treatment company Rino International Corp. helped drive that firm's stock from $13 to almost zero, erasing about $370 million in market value. It wasn't a fluke. To see the SEC's letters to Rino, click here. Block gained fame for his short-selling calls on Chinese stocks after regulators halted trading in four of his first five targets, starting in June 2010. A lawyer and a New York native who founded Muddy Waters in 2010 in Shanghai, Block moved the company to Los Angeles later, saying Chinese officials were harassing his analysts. The SEC, set up in 1934 to lift confidence in securities markets during the Depression, reviews 4,000 companies a year with special attention to new filers and industries in the spotlight, from Facebook Inc. to big banks. SEC letters and company responses aren't posted to the regulator's website until a month after they are sent, receiving no fanfare to alert interested investors. Forces Disclosures As a result of the correspondence, the agency often forces companies to amend or make additional disclosures to inform investors of material risks. Some investors spot the required amendments to annual reports or registration statements. What's missed by many is the detailed discussion of shortcomings in a company's business that can warrant a bet against the stock. Take the backstory about Rino in its correspondence with the SEC. As early as 2007, the agency quizzed Rino over the departure of its accountant, saying it must disclose any disputes with professionals in its filings. Rino at first insisted there were none. The SEC pushed back, telling the company that investors must be told if an auditor expressed "uncertainty regarding the ability to continue as a going concern." Rino amended a filing to say there were no disagreements over financial statements — "except" that the auditor doubted the company was viable. Almost Zero Four years later, the SEC stopped trading of Rino because it didn't tell investors that investigators hired to probe fraud allegations had also left. By then, Rino had fallen from $34, briefly becoming the Nasdaq's top short-seller target. Block piled on with his Nov. 10, 2010, report. That report finally caught the attention of Rino holders who had missed or ignored accounting-violations clues in SEC letters, perhaps dazzled by the lure of riches to be made by investing in a booming China. Investment advisers were touting China's gross domestic product, which the World Bank said rose 10.4 percent in 2010 and 9.2 percent in 2011. That growth helped drive up the price of PetroChina Co. enough for it to pass Exxon Mobil Corp. as the world's most valuable company by market capitalization in 2009. Roth Capital Partners, a U.S. investment bank with an office in Hong Kong that's been bullish on Chinese stocks, said in 2010 that China's growth would outpace other economies "for the foreseeable future," boosting the country's U.S.-listed stocks. China Mania While Block was getting started with his research, China fans clung to shares such as Sino-Forest Corp., now bankrupt, and New Oriental Education & Technology Group Inc. New Oriental, usually known as EDU for its stock symbol, was investigated by the SEC and staved off a stock collapse until 2012, perhaps because investors didn't do their SEC homework, said Peter Henning, a former SEC lawyer who teaches at Detroit's Wayne State University. "That's the obligation of every investor," he said. "A company amends its filings because information is already out in the market that needs to be corrected or updated." Chinese companies in recent years were the object of at least 19 lawsuits and other enforcement actions targeting 64 defendants in all, according to SEC data. They ranged from China Natural Gas Inc., accused last May of defrauding investors, to now-defunct China Energy Savings Technology Inc., sued in 2006 for stock manipulation. Deloitte & Touche LLP was among at least six auditing firms named in four of the actions. In addition, trading in seven Chinese companies' shares, including Rino's, was suspended. Stocks Deregistered About 50 foreign securities have been deregistered in recent years and more than 40 foreign issuers were sued for fraud, sometimes years after early warnings about accounting irregularities appeared in agency correspondence. Pushing foreign executives toward use of U.S. reporting standards is the daily work of the SEC's corporation-finance teams, agency correspondence shows. For example, Rino was ordered to tell shareholders about insider ties that might hurt their interests. The SEC noticed in a registration statement that Zou Dejun, Rino's CEO, and Qiu Jianping, its board chairman, were married. The agency asked for a statement about the potential conflict that might cause. Rino added a disclosure in 2008 that the couple then owned 100 percent of Rino equity and also said: "As such, we cannot assure you that Mr. Zou, in his capacity as our CEO and director, will act in the best interest of the company." Rino was eventually listed in the U.S. in May 2008. Math Problem EDU, a Muddy Waters target that says it is China's largest private education provider, had difficulty calculating its net income initially. One affiliate supposedly contributed 99 percent of revenue and only 27 percent of net income. Challenged by the SEC, the company agreed to show in future filings that almost all of net income came from the affiliate — if its various parts were added up. EDU also had to be told there is a legal form for certifications, and it can't be changed to use different words or punctuation in endorsements of its financial information. After being scrutinized from 2009 about everything from revenue reporting to terms of contracts, EDU said last July that the SEC was investigating whether its Beijing New Oriental Education & Technology entity was appropriately consolidated in financial statements. The next day, Muddy Waters posted a "strong sell" recommendation on its website, saying "it is probable that EDU will have a significant restatement" of results. Block said he read the SEC letters sent to EDU, and the company's responses. 'Fairly Helpful' "The back and forth between the two was overall fairly helpful to us during our research," he said. In one letter, EDU responded to the SEC query about the affiliate's net income contribution. Going through the numbers, Block said he believed EDU failed to include the effect of certain taxes that could have amounted to about one-seventh of reported 2008 profit. A later disclosure gave different results for the same entity, he said. Sisi Zhao, EDU's investor-relations director, didn't respond to e-mails asking for an update on the SEC probe and comment on Muddy Waters's report. Rino Chief Financial Officer Ben Wang didn't answer e-mails seeking comment on Rino's experience with the SEC or Muddy Waters. Byron Roth, Roth Capital's chief executive officer, didn't respond to e-mails seeking comment on the firm's bullishness on Chinese shares. Focus Media Despite SEC letter data, Block hasn't had much success keeping down shares of Shanghai-based advertising firm Focus Media Holding Ltd., which is going private with Carlyle Group LP. He has posted six reports on the company on Muddy Waters's website since Nov. 21, 2011. Focus Media said Jan. 18 that the SEC was looking at its past acquisitions. The SEC had queried the company in 10 letters, prefiguring its current investigation. Writing down eight newly bought advertising businesses and handing them back to their owners at a discount, Focus Media was told in 2010 to disclose losses and explain this "apparent pattern." Muddy Waters noted the trend in a Nov. 21, 2011, report, saying investors should worry "where cash actually moved." "There were some notable exchanges" between the SEC and Focus Media, Block said. Questionable Deal Reading SEC demands in the 2010 letters for more disclosure on Focus Media's sales of stakes in Internet ad-service company Allyes Information Technology, Block concluded the regulator found the deal "questionable," he said. Using a list drawn up for the SEC of acquired mobile and Internet ad companies that Focus Media resold to their owners, Block was able to research the purchases and conclude they never occurred, he said. Focus Media briefly fell to $15.43 from $25.50 after Block's first report said its ad network was smaller than claimed. The shares rebounded to the $20 range after an August buyout bid by Carlyle Group-led investors, which was accepted in December. Focus Media has said it is cooperating with the SEC in its probe. Jing Lu, a company spokesman in Beijing, didn't answer e- mails seeking comment on Block's reports. As warnings, SEC letters aren't as vivid as Block's reports and stories. Writing of "cooked books" and "sub-par" technology, he said five out of nine "purported" customers he interviewed denied buying Rino's desulfurization systems and that one buyer was "not satisfied." Cooked Books In the Rino case, Block beat the SEC to the punch in saying the company had two sets of books. He had read Chinese disclosures and saw that 2009 China revenue was 94 percent lower than its U.S. numbers. "In reality its revenue is under $15 million," his November 2010 report said. The SEC mentioned for the first time "the existence of two separate and materially different sets of corporate books" when it halted trading in April 2011. The regulator asks foreign companies how they report at home "as appropriate," SEC spokesman John Nester said. On the other hand, the SEC pushed Rino starting in 2008 to disclose how sales were counted, how it depended on customer approval, and why it had so many paper assets or receivables — all issues later taken up by Block. Forced Disclosure The SEC forced Rino CEO Zou Dejun to revise a 2008 registration statement eight times over seven months. An Aug. 19, 2008, report dealt with "non-reliance on previously issued financial statements." The report was demanded by the SEC in an Aug. 11, 2008, letter reminding Rino that it had restated results after "material errors." Sometimes Block does on-the-ground reporting to supplement his review of filings and SEC correspondence. After visiting the steamy factory and old machinery operated by Baoding, Hebei- based Orient Paper Inc., he decided to short the company's stock, he told Bloomberg News last year. In a short sale, investors borrow stock from current holders and sell it, hoping to profit by repurchasing the securities later at a lower price and returning them to the holder. Some China stocks dipped on revised filings required by the SEC, indicating Block wasn't alone in watching disclosures. Still, with investor mania about China strong, some of those stocks went up again. Stock Rebound Fushi Copperweld Inc., made to disclose how a possible $7 million legal judgment would hurt liquidity, fell from about $9 to $7 after the company said June 9, 2009, that it owed the money. The stock surged to $12.76 April 2010 and was taken private in December 2012 at $9.50. Rino tumbled to $2 from $10 after a June 11, 2008, annual report revision of "material errors." The next year it was 17 times higher. "No question, a disclosure is more important than a short sale report," said retired short seller David Rocker of New York-based Rocker Partners, whose past targets included AOL Inc. "Both are merely starting points, and then you should do your own homework." Sometimes Muddy Waters goes where the SEC can't. It targeted Sino-Forest, the bankrupt tree grower delisted from the Toronto Stock Exchange, and Olam International Ltd., the Singapore-backed peanut merchant. Both escaped SEC grilling because they weren't required to file disclosures in the U.S. Sino-Forest Hedge fund manager John Paulson sold his Sino-Forest stake at a loss of about C$105 million ($105 million) after Block's report. Paulson spokeswoman Armel Leslie declined to comment. While the SEC provided investors some of the earliest warnings about Chinese accounting in its correspondence, it became more direct after former Chairman Mary Schapiro got an April 2011 letter on the subject from Patrick McHenry, a North Carolina Republican who chairs the House financial services and government reform committees. "Review the company's SEC filings," the SEC said in a June 2011 bulletin on its website about Chinese companies. "Be aware of companies that do not file reports with the SEC. Be skeptical." The answer for some Chinese companies seeking to avoid SEC scrutiny is to flee U.S. exchanges. Some have done so, citing stringent SEC rules. Focus Media, whose $3.7 billion buyout will be China's largest, was one of 49 companies that said it will go private, Roth Capital said in November. As useful as the hidden-in-plain-sight SEC correspondence can be to investors as an early warning of unknown risks, the letters might be even more useful if published in real time, Block said. "In the investment world, information is always more valuable when made public sooner," he said. "SEC correspondences sometimes contain important red flags, and publishing them sooner would give more investors a chance to read them before making investment decisions."   |
| Deloitte sued over audits of ChinaCast Education Posted: 20 Feb 2013 08:21 AM PST  Source: Reuters (Reuters) – A group of U.S. investment funds has sued the Chinese and U.S. affiliates of Deloitte Touche Tohmatsu DLTE.UL, blaming them for investor losses at troubled ChinaCast Education Corp (CAST.PK). ChinaCast, which provides post-secondary education and e-learning in China, sold shares in the United States on the Nasdaq stock exchange (NDAQ.O). It was delisted last year for failing to file its 2011 annual report. The company has been under pressure since ousting former chief executive Ron Chan last year. ChinaCast said at the time that it had uncovered questionable activities and transactions involving Chan that "raise the specter of possible illegal conduct." Chan could not be reached for comment on Tuesday. In a statement to shareholders last year, he denied allegations of wrongdoing. ChinaCast assets were transferred to an entity owned by Chan, "a brazen looting" that Deloitte failed to detect, according to the plaintiffs' complaint, which was dated Friday. "Deloitte put its name and brand behind the certification of financial statements that were almost entirely false," the complaint said. Deloitte, the world's second-largest accounting and consulting firm, has run into problems with several audits of its China-based clients listing on U.S. exchanges. A Deloitte spokesman could not immediately be reached for comment. Deloitte's Shanghai-based affiliate audited ChinaCast's annual reports for the years 2007 until 2010, according to the complaint. The complaint said Deloitte & Touche LLP, the U.S. audit firm, controlled the audit of ChinaCast's financials because one of its partners was a key audit team member for issues involving compliance with U.S. accounting standards. The plaintiffs include Fir Tree Value Master Fund LP, Columbia Pacific Opportunity Fund LP, Lake Union Capital Fund LP and Ashford Capital Management Inc. Last May, Deloitte was charged by the U.S. Securities and Exchange Commission on allegations it failed to turn over documents related to its audit of Longtop Financial Technologies Ltd, a China-based software company under investigation for accounting fraud. Deloitte has said that China's state secrets law prevents it from turning over documents. Investors have suffered massive losses since 2010 because of a string of accounting scandals at China-based companies, but the SEC has struggled to take action because it is often unable to get evidence out of China. The case is Special Situations Fund III QP et al vs Deloitte Touche Tohmatsu CPA Ltd, U.S. District Court, Southern District of New York, No 13-1094.   |
| Posted: 20 Feb 2013 08:09 AM PST Have You Heard…   |
| China’s Truman-Style Resource Quest Tests UN Law and Neighbors Posted: 20 Feb 2013 08:31 AM PST  Source: Bloomberg News By Daniel Ten Kate When President Harry Truman's push for oil in 1945 prompted him to claim all resources on the U.S. continental shelf, he unleashed a global race for the seas that led the United Nations to create rules for asserting territory. An unfavorable ruling for China would provide insight into whether it will heed diplomatic pressure as it pushes to keep foreign militaries from its shores and gain access to the area's oil, gas and fish. The Philippines and Vietnam, whose combined defense budgets amount to about 4 percent of Chinese outlays, reject the nine-dash line as a basis for joint oil exploration. "This has a much larger repercussion, which is about how will China in the coming years address disputes with neighboring countries?" said Ralf Emmers, an associate professor at Nanyang Technological University in Singapore. "That's a very important question if you sit in Hanoi, Manila and also Tokyo." China has until tomorrow to appoint a member of the dispute resolution body after the Philippines selected Rudiger Wolfrum, one of 21 members of the UN-backed International Tribunal for the Law of the Sea. China's ambassador met with Philippine officials and told them it "does not accept such a notice and has returned it," Foreign Ministry spokesman Hong Lei told reporters in Beijing yesterday. 'Unfounded Accusations' "The Philippines' act is against the consensus regarding the South China Sea reached between Asean and China," Hong said, referring to the 10-member Association of Southeast Asian Nations. "It not only contained many legal and historical errors, but it also contained many unfounded accusations against China." If China doesn't appoint someone, the Philippines can ask the tribunal's president to pick the remaining four arbiters. Rulings are valid even if one party doesn't cooperate. The Philippines is "committed" to arbitration and a "friendly, peaceful and durable form of dispute settlement," the country's foreign affairs department said in an e-mailed statement late yesterday, adding that the five-member panel will be formed with or without China's participation. 'International Outlaw' In the seven law of the sea cases that have gone for arbitration, all countries have respected the outcome even if they disagreed with the decision, said Paul S. Reichler, a lawyer with Foley Hoag LLP who has been retained by the Philippines. "You'd have to assume that they think even in the case of an adverse judgment, their core interests are better served by compliance than becoming an international outlaw," Reichler said. "The examples of non-compliance or non-appearance are extremely few and far between." China's map, first published in the 1940s, extends hundreds of miles south to the equatorial waters off the coast of Borneo. It claims "indisputable sovereignty" over more than 100 islets, atolls and reefs that form the Paracel and Spratly Islands, and jurisdiction over the seabed and subsoil. The Philippines and Vietnam have led opposition to the map. Under the 1982 Law of the Sea, which China ratified in 1996, a country can exploit oil, gas and other "non-living resources" on its continental shelf or an area stretching 200 nautical miles from land known as an exclusive economic zone. 'Learning Process' China has focused on joint development with the Philippines and Vietnam in part to avoid legal questions over which country can exploit the resources, according to Hong Nong, a deputy director at the National Institute for South China Sea Studies in Haikou, China. Beijing's leaders are torn between ceding control to a third party and appearing afraid to defend its claims in international arbitration, she said. "It's a learning process, and during the learning process we might give the wrong impression to our neighboring countries because we are very big in size," Hong said. "China wants to be a responsible stakeholder." China National Offshore Oil Corp. estimates the area may hold about five times more undiscovered natural gas than the country's current proved reserves, according to the U.S. Energy Information Administration. China surpassed the U.S. as the world's largest energy user in 2010. Cable Cutting China has cut the cables of survey ships working for Vietnam, chased away an exploration vessel operating off the Philippine coastline and sent its first deep-water drilling rig to the region. In June, Cnooc invited foreign oil firms to bid in areas that Vietnam already awarded to companies including Exxon Mobil Corp. and OAO Gazprom. When state-run Vietnam Oil and Gas Group condemned the move, ministry spokesman Hong called on Vietnam to stop actions "that infringe upon China's rights." The location of Cnooc's oil blocks indicate China is relying on historic rights to back the claim rather than an exclusive economic zone or continental shelf, according to Mark Valencia, an Hawaii-based associate at the Nautilus Institute for Security and Sustainability. That would be unprecedented, much like Truman's claim. "That was a completely new concept in international law and many countries followed," Valencia said. "It's not inconceivable that China may try to declare a precedent regarding its claim to seabed resources in the South China Sea." Resource Rights China exempted itself in 2006 from disputes that involve sea boundaries, historic bays, military activities or initiatives of the UN Security Council. To get around that, the Philippines argues that negotiations starting in 1995 have failed and the case involves rights to resources, freedom of navigation and whether China can declare an exclusive economic zone around certain land features. China has made a more detailed continental shelf claim in the East China Sea, where it has sparred with Japan over disputed islands. The tension has damaged trade ties and raised concern in the U.S., which has a defense treaty with Japan. The world's biggest economies sparred in 2009 over the interpretation of the UN maritime law after Chinese vessels harassed a U.S. naval ship 75 miles south of Hainan Island. China said military vessels aren't allowed in the area without permission, whereas the U.S. says ships are allowed anywhere except for territorial seas 12 nautical miles from shore. "It's a defining moment in terms of determining what international system we are going to have," said Henry Bensurto, who works on maritime issues at the Philippines' foreign affairs department. "At the very least you have now an opportunity China will have to clarify what its nine-dash line is. For a long time the world has been guessing."   |
| U.S., China Ties Tested in Cyberspace Posted: 20 Feb 2013 08:35 AM PST  Source: Wall Street Journal By Julian E. Barnes, Siobhan Gorman and Jeremy Page Ties between China and the U.S., strained by military rivalries and maritime disputes, may face an even greater test from the newest front in global conflict: cyberspace. Experts say the subtle but significant shift in how the U.S. approaches the face-off carries significant implications for the next steps of U.S.-Chinese diplomacy as the Obama administration sets about engaging a revamped government in Beijing with its second-term national-security lineup. "There is no doubt that cyber tensions are growing, and they are keeping pace with growing tensions in the near seas of China," said Patrick Cronin, a senior adviser at the Center for a New American Security, a think tank generally supportive of the Obama administration. "In many ways there is a connection between China asserting itself in the maritime domain…and now in the cyber realm as well." The Obama administration reacted swiftly to a report Tuesday by Mandiant, an Internet security firm, citing evidence that a unit of China's People's Liberation Army was responsible for computer espionage around the world, including cyberattacks on American corporations and government agencies. "The United States has substantial and growing concerns about the threat to U.S. economic and national security posed by cyber-intrusions, including the theft of commercial information," White House press secretary Jay Carney said Tuesday, adding the U.S. has raised its objections "at the highest levels" with China. China disputed Mandiant's allegations and countered with its own statement that the U.S. is the top source of attacks against Chinese targets. "Cyberattacks are anonymous and transnational, and it is hard to trace the origin of attacks, so I don't know how the findings of the report are credible," Chinese Foreign Ministry spokesman Hong Lei said at a daily press briefing that was echoed by officials at the Chinese Embassy in Washington. U.S. officials said the allegations in the Mandiant report come as no surprise and build on other evidence of cyber infiltration. A 2011 intelligence report publicly accused China of a role in cyberattacks. More recently, a U.S. assessment known as a National Intelligence Estimate, which remains classified and hasn't been released, cited the Chinese government as being behind pervasive cyberthefts resulting in the loss of intellectual property, according to people who have read it. The latest revelations come as the U.S. government has scrambled to bolster government and private-sector defenses. President Barack Obama last week signed an executive order to begin to establish voluntary standards for companies to use to improve their cyberdefenses. With a growing body of evidence of Chinese involvement in cybertheft exerting pressure on U.S. relations with China, officials cited one reason for hope: that mounting evidence might force Beijing to engage in a more open and forthright dialogue about its activities, a position echoed by outside defense experts. "Our military already believes the PLA is behind a lot of this stuff," said Martin Libicki, a scholar at the Rand Corp., a nonpartisan think tank that regularly does research for the Defense Department. "The Chinese response is pretty typical: 'How dare you suggest we do this?' But you would think it would be harder and harder for them to maintain that point of view as our evidence gets more and more specific." Some experts say China's leadership change last year, when Xi Jinping succeeded Hu Jintao as president, may present an opportunity for a more frank exchange of views. But Harold Brown, a former U.S. secretary of defense, said the Chinese military sees advantages in secrecy, a view that has consistently derailed attempts to improve defense ties. "In order for there to be a decent military-to-military dialogue, both sides need to say something about what their plans are, how they behave and try to come to agreement on the rules of the road," he said. China broke off military exchanges with the U.S. for a year after the approval of a sale of U.S. arms to Taiwan was announced in January 2010. Diplomats say defense ties improved steadily through 2011 and 2012, with Gen. Liang Guanglie in May becoming the first Chinese defense minister to visit the U.S. in nine years, and U.S. Defense Secretary Leon Panetta paying a reciprocal visit to China in September. In recent months, however, tensions have risen again following a series of confrontations between Chinese and Japanese ships and aircraft patrolling around disputed islands in the East China Sea. While the U.S. has said that it doesn't take a position on the sovereignty of the islands, American officials have made it clear that the islands are covered by the mutual defense treaty between the U.S. and Japan. In Washington, defense and Asia experts argue the growth of revelations regarding Chinese intrusions is elevating cyberattacks to a more serious issue. Victoria Nuland, the State Department spokesman, said Tuesday the U.S. has "regularly and repeatedly" raised concerns with China about cyberthefts with Chinese officials. "We're obviously going to have to keep working on this," she said. China experts in Washington expect the next high-level dialogue to take place when new Secretary of State John Kerry travels to the region in the coming months. President Barack Obama will have the opportunity to meet later this year with President Xi alongside a Group of 20 leading countries in Russia in September.   |
| Buying fake walnuts in China (photos) Posted: 20 Feb 2013 02:55 AM PST IN China, everything is fake. Assume that, and you will not be disappointed. One day an explorer will discover that China does not really exist, it being the product of Latvian Counterfeiters working for a marketing firm in Dallas. In these photos, we can see what you get when you crack open a Chinese Walnut. You get a pebble in a tissue. But it's most likely a fake pebble made from human remains. The tissues are, of course, recycled blisters…
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| Visa application made easier, cheaper Posted: 20 Feb 2013 02:27 AM PST US visa applicants will find the whole procedure getting much easier next month when China introduces a new method for visa appointment, fee payment and passport delivery. Starting March 16, Chinese applicants will only need to pay a lump sum of US$160 for most types of nonimmigrant US visas. Previously, applicants need to pay additional fees for interview appointment and passport delivery. They will have the option of paying online, using a debit card issued by a Chinese bank or a credit card issued by a foreign bank, or paying their application fee with a UnionPay card at any CITIC Bank ATM terminal or with cash in any CITIC Bank office. |
| Man held for gruesome attack on parents Posted: 19 Feb 2013 11:33 PM PST A college graduate who allegedly tore a large piece of skin off his mother's head and cut off his father's wrist and heel tendons because they refused to give him money has been detained by police in Kaifeng City, Henan Province. The man, surnamed Zhou in his 30s, hated his parents after finding out that they gave money to his younger brother to buy a house. To appease him, his parents borrowed 30,000 yuan (US$4,800) from relatives, but Zhou was demanding more, a local newspaper reported today. "He just pulled away my quilt and started slashing me," the father said from his hospital bed, his head and limbs wrapped in gauze, as he recalled the horrible attack on February 10, the Henan Business Daily said. That was the only start of something more gruesome days later because the old couple didn't report to police in a hope to save their son's reputation. Last Friday, Zhou saw a relative visiting his father in the hospital and giving him 2,000 yuan to cover his medical bills. Zhou took the money and was about to put in his own pocket, then his mother stopped him and scolded him. In a rage, Zhou tore a large piece of scalp from his mother's head. "I heard of someone being skinned alive, but I never imagined a child could skin his own mother," the father said. The elderly woman is still in the intensive care unit, the report said. People familiar with Zhou said he is a bachelor without a job after he got fired from his teaching job in a university. Later he lost all his savings in business. Police said Zhou refuses to say anything and is undergoing a psychological examination, the report said. |
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