Amd Commo Exagr Discussion Threads

[loverat] 08/12/2009 08:52

And a little logo like this for the top right please.

[loverat] 08/12/2009 08:43

Yes - I would like this logo with the Docklands skyline in the background as per the current site.



However, I would be grateful for an orange background please and profiles of the current directors.

[loverat] 08/12/2009 08:07

And as for matters here perhaps the directors of COMG would be prepared to offer a desk? I can bring my own laptop, kettle and teabags and will pay for the daily commute to Bournemouth. In return perhaps it would be possible for Anomalous to knock up a website for me so I can communicate with shareholders?

[loverat] 08/12/2009 06:31

A few posts back I mentioned the problems at MDX and the efforts of the directors there to salvage the company. I do follow the BB and it is a complex situation. It seems that like LDC there were directors ripping off the business, poor controls and unbelievable goings on.

The director of that company (BJM see below) posts on the board as a way of keeping shareholders updated. Must say, I know little about the man but I think he is their best hope of salvaging something. Huge sums by private investors were invested and quite understandly tensions are running high. Conflicts about what to do about past activities etc. I suppose LDC shareholders were lucky that Keith Negal was able to release money from the company to carry out an investigation in the first place. Also the recovery of the assets of the company and restoring value was dependent on past events being investigated and therefore shareholders received a double boost - recovery of their assets and the findings of past events being published in the open.

Looks like BJM has a much more difficult task due to the circumstances of the fraud litigation and lack of resources. However, for those who wish to investigate past events he has kindly offered a desk for anyone interested. Personally, I think that is a very constructive suggestion. Certainly more so than spending all hours of the day arguing on a public bulletin board.

I wish BJM and all MDX shareholders the best and hope they all pull together constructively to resolve matters.


B J Muncaster - 8 Dec'09 - 06:02 - 26106 of 26106

Chay,
With respect. Do you have any idea how much time it would take and the effort involved to report in detail on the status of 151 products that were supposedly on sale, the (from memory) 84 dossiers that were purchased, the multiple core-tech developments, and the multiple partner deals announced?

We have a very small team and our focus has been on (a) ensuring the Company will survive, (b) raising funds to do the job, (c) restructuring the development programme and resurrecting relationships, (d) restablishing and growing the Menoflavon brand, (e) sorting out the dysfunctional corporate structure, (f) getting the accounts into shape to be audited, and (g) dealing with litigation matters as both plaintiff and defendant.

In addition to these obvious tasks, we've made significant reductions in overhead costs, implemented a more efficient IP management structure, rehoused TabWrap (Swollo and pilot WaferTab underway), held an AGM, maintained constant dialogue with interested investors by phone, email and visits (my inbox currently has 1065 emails in it), launched a new website, and, most importantly, made good progress with new and potential new customers.

The team: me, Gary and Keith as directors, Steve, Nat and Paul in the lab, Jayne and Diane in accounts, Chisom in legal, and Sue the office oracle. We have Alison, Bart and Ed chipping in as consultants. And that's your lot.

What went on in the past will become known at some point, and there's nothing we're hiding. But to be frank, trawling over historical issues is not our priority and won't be until we have the time to do the job properly. If any volunteer wants to spend their time and their money going over the history they'll be made most welcome and we'd even make a desk available for them.

[debaleb] 06/12/2009 17:40

Very familier indeed.

[jonc] 06/12/2009 15:35

Hmmmm.

Sounds very familiar.

[loverat] 06/12/2009 14:41

And I have one more thought on London Asia Capital. Despite still having some reservations concerning directors not involved with Simon Littlewood's activities I think Jack Wigglesworth deserves some praise for staying on to help clear up the mess. It can't have been easy being surrounded by a bunch of con artists.

Although I have not mentioned him a great deal, when I have, perhaps I have been too harsh. I am sure London Asia Capital shareholders will wish him well.

[loverat] 06/12/2009 12:10

The shareholders and composition of shares in this company makes interesting reading. Now, there is no doubt that there are several links between the personal of this company and various share transactions and the mainly ex-management of London Asia. There can be no dispute about that.

Someone said sometime back that the investigations and attempts at recovery regarding London Asia should also include COMG and CEG. I think the right course was not to make support for Keith Negal and what he was trying to achieve conditional on matters here being looked at. After all, he was appointed CEO of London Asia and not COMG or CEG. Now that he has achieved what he has, which should hopefully benefit LDC holders, I believe that some matters here will be addressed too. London Asia have a holding here and we'll see what if anything occurs in due course.

[loverat] 06/12/2009 08:04

Well, I have just spent the last few hours mulling over the situation here. The last update we had was on Anomalous's COMG website saying that Allnutt and Holmes were in negotiation with loan note holders and they would update shareholders if those discussions were fruitful.

No further update and according to Companies House there is a proposal to strike off the company. I guess this company is pretty much in dire straights and perhaps posters should have taken the hint when one of them was told in a telephone conversation with Simon Littlewod some time back that this was bust.

Have to say, my view is that one should never give up hope or rely on rumour or speculation. No, I think we will just have to keep this thread going until the directors provide a further update. Also I have come up with a way forward.
We all know that Littlewood was involved in COMG too. Indeed it was him and other 'independent' directors who concluded that the sale of the education business to Allnutt and Holmes at a price of 70K was fair.

On what basis did he decide this was a fair price when the Bournemouth Education Business was bought for £500,000 plus a few years previously?

According to Anomalous the aquisition was a bargain at the time and he is on record as saying that £200,000 extra cash was found in the bank account which was not listed in the original company accounts. Indeed "£200,000 for nothing"
is what Anomalous said.

How is this possible and where did Anomalous get this information from?

How are the education businesses doing now?

I think shareholders are entitled to answers. Particularly because the main part of COMG was flogged off for a nominal sum and used as justification for it to focus on the change of strategy to commodities. A few months later the shares were suspended. Yes - a few months. So what happened?

Had the company retained its education business instead of going off on some wild venture with 70K in their pockets would COMG be in this mess now?

To date - nobody has had the decency to answer our concerns.

A fair amount of information about the performance of the various companies under discussion has been gathered. However, over the next few weeks I will be liasing further and concentating on what is known so far and what is not known. Over the next few weeks I will be picking up balance sheets, tipping them on their heads, giving them a little shake and seeing what falls out (or not as the case may be)

Once this has been done, a view will be taken on the next steps to be taken. As previously reported some steps have already been taken - and I await the results with interest.

And after the successes so far at LDC, perhaps it is time for the management of
COMG to invite Keith Negal on to the board to investigate matters here. I am sure his findings would be very interesting.

[debaleb] 05/12/2009 18:17

Good work lately Loverat, keep it up.

[ls lowry] 04/12/2009 21:31

court protocol demands far more from both sides now. Previously the plaintif could avoid giving too much info upfront now you are expected to give more info on a claim.

[loverat] 04/12/2009 05:53

Watching the news yesterday concerning RBS and the bank bonuses. Just thinking how things have changed..... in the past it was prudence and thrift. Today it is greed and making a fast buck.

Watch this -
just shows how things have changed (except the very last scene which led to the run on the bank!)

[loverat] 03/12/2009 16:53

Now, after the discussion about Simon Littlewood on LDC, let us now get back to events here. Yeah, I know he was a director here too but no evidence I can see that he was making illegal share transactions here, diverting COMG funds to his wife or using shareholders funds to loan to the 'Croatian Mafia'

I might be wrong of course. But the investigation continues in any event.

[loverat] 02/12/2009 05:19

In they go....

[loverat] 02/12/2009 05:00

Yes - I think I might even stick my neck out and say that Keith Negal looks like a first rate buinessman. What do you reckon Anomalous?

Do you think we ought to bin these posts now?



Anomalous - 15 Feb'05 - 10:52 - 3854 of 8914

LDC is going to be a very lucrative share with the developments they've lined up. The foundation work is in place. Simon, our genius, is going to build us all a fortune based on these babies.


Anomalous - 8 Jun'04 - 23:11 - 158 of 243

Don't let the website put you off. I know the people behind this company and I can assure you they are first rate businessmen.


Xen0phon - 7 Nov'07 - 12:38 - 8286 of 8829

I've also heard rumours that LDC is being 'courted' by other companies (well known City firms) jealous of LDC's Chinese broker license. It appears that we may be in a position to capitalise on this.

Simon is continuing to generate the wealth and now that we've turned the corner on the share sales - clearing the overhang - the way is free to start accumulating value again.

[loverat] 02/12/2009 04:41

Official confirmation that the parasites were defeated at the EGM. Seems onwards and upwards for London Asia Shareholders and I am sure we will wish them all the best.




30 November 2009

Dear Shareholder
Results of the EGM

I am delighted to report that at last week's EGM the resolutions were passed as your Board recommended. Indeed, if the votes of the requisitionists and Simon Littlewood (who voted with them) are discounted the overwhelming majority of shareholders supported your Directors, decisively rejecting the Proposed Directors with their liquidation strategy. Instead shareholders voted strongly in favour of the Proposed Tender Offer by Wuhan Kaidi Holding Investment Co. Limited of 5p cash per share to enable Kaidi to acquire a shareholding of 29.9% of the Company.

Before we can progress this we must first complete the challenging task of preparing accounts for prior years. By now you will have received the Report & Accounts for the year to 31st December 2007, which will be presented to shareholders for their approval at a General Meeting to be held at 11:00 am on 18th December 2009 at the offices of Speechly Bircham LLP, 6 New Street Square, London EC4A 3LX.

Although we have been delayed by the EGM we now hope to circulate the accounts for 2008 in January of next year, holding the next General Meeting in February. This will bring us back in line with our statutory requirements. The 2009 accounts will follow very quickly and we expect to circulate the Tender Offer document shortly afterwards. Once the Tender Offer has been successfully implemented the next step will be to return the Company to a listing, which we hope to complete towards the end of 2010, enabling shares to once more be freely traded.

We are extremely grateful for your vote of confidence at the EGM. As a demonstration that we share this confidence in the future, following the EGM your Directors purchased an aggregate of 10 million shares at a price of 5p. It is our intention to continue to work energetically to justify your support and increase the value of your shares, and ours, in London Asia Capital plc.

For further information please monitor the Company website which will carry regular updates; www.londonasiacapital.com.

Again, thank you for your support.

Yours sincerely,


Keith H A Negal MBA FCMA
Chief Executive

[tarvold] 30/11/2009 02:30

Simon Littlewood, Merchant Banker. Say no more.

[loverat] 29/11/2009 18:56

And in my opinion this is the most shocking - diversion of funds by the wife of the CEO to Littlewood and Joyce Ng - who I assume is the wife of Victor Ng. And of course - the loan to Croatia.

For the benefit of readers here - Victor Ng was a director of COMG also and was blamed by James Holmes for its failure in the July message to shareholders.

I think they (and their wives) should stop hiding behind their computer screens and make a start by apologising to investors on here, the other directors they deceived and Keith Negal for having to sort out the mess they left.

They can then begin raising the funds to pay back to shareholders. And if that is difficult may I suggest that Josée Lai and Joyce Ng look in their vast wardrobes and see if they cannot sell a few hundred pairs of their shoes and dresses on E Bay. Let me know - I can set up an account for you and arrange for the proceeds to be transferred to the RIGHTFUL owners.


Diversion of Funds

In December 2007, London Asia Capital (Singapore) PTE Limited ("LAC(S)") was due £1.6 million from China Growth Opportunities plc in respect of performance fees. At the written instructions of Josée Lai, wife of Simon Littlewood, these funds were not paid to LAC(S) but instead to London Asia Fund Management Ltd, a Brunei company in which LAC held 40% of the equity, while Simon Littlewood and associates held the remaining 60% shareholding.
On receipt of these funds by the Brunei company, £401,440 was immediately transferred to each of Simon Littlewood and Joyce Ng. In so far as your Directors are aware, LAC and its subsidiaries have no contractual relationship with Joyce Ng although she has been in receipt of substantial sums from LAC Group companies.


Loan of $5 Million Written Off

On 7th September 2005 (well before the period dealt with in these accounts, but never previously explained to shareholders) LAC plc lent $5 million to Nourican Adriatic d.o.o., in Zagreb, Croatia. The purpose of the loan was to help Nourican Adriatic d.o.o. provide evidence to the Croatian Stock Exchange (Zagrebaka Burza) that cash needed for a bid to be made by two Croatian companies for Industrogradnja was available. LAC was to receive a fee of US$ 1 million for this loan.

The bid for Industrogradnja was launched on 11th November 2005 at a share price of 650 Kuna at a discount to its market price of 810 Kuna. As a result, only 2,640 shares were tendered for at a total cost of $273,244. It appears that the $5 million loan provided by LAC was not used for the bid and should have been returned to LAC in January 2006, together with the $1 million fee. Sadly, the $6 million has never been received by LAC, nor is there documentary evidence to show that steps were taken through courts in any country to recover this money.

The document transferring the $5 million to Nourican Adriatic was signed solely by Simon Littlewood. A signed contract confirms that the loan was to have been secured by a pledge over 25,000 shares in Industrogradnja d.d., but no signed guarantee or pledge has been traced.

[loverat] 29/11/2009 18:29

And for those who have not read the shocking and shameful events at London Asia Capital - here is the summary. A clear, concise and in my opinion honest appraisal of events. I think the hard work carried out by Keith Negal and the others to repair the damage bodes well for the future of LAC.

And as for what went on I think it could quite easily be compared to Meldex and Langbar, albeit perhaps on a smaller scale. Refreshing to see it all out in the open.


Dear Shareholder

The last year has been extremely difficult and I am pleased that we are now in a position to put before you the accounts for 2007. It is the intention of your Board that the accounts for 2008 and 2009 will follow shortly and that by March 2010 we will be able to put the appalling affairs, which have caused us so much trouble and damaged the reputation of your company, behind us.

Moreover, it seems very likely that out of this unholy mess will develop a strong relationship with a successful Chinese entrepreneur. We believe that this has the potential to lift the performance of your company above many others whose business lies in China.

During our investigations your Directors have found it difficult to grasp the full extent of the problems we unearthed. The task of putting matters right and preparing accounts for audit has taken many months. One of the most difficult problems to solve has been dealing with the many millions of shares in London Asia Capital Plc either issued in order to purchase valueless companies or purchased by subsidiaries and associates of London Asia Capital Plc in an attempt to support the share price. We have been successful in cancelling 98m of these shares, thereby increasing the net assets per share by over 40%. Some of the shares in LAC purchased by group companies have been sold for the benefit of shareholders. Others, however, were purchased illegally leaving us no choice but to write these off at a cost to the company.

These transactions will not wash through the system until the accounts for 2009 and this will inevitably cause these accounts for all three years to look rather strange. From 2010 these peculiarities will be behind us. In the 2007 accounts the balance sheet and the adjusted net assets per share provide shareholders with a true picture.

At this point I must make it clear that the interim accounts for 2007, which showed a net worth of some £44 million were so inaccurate as to be meaningless; for example, £10 million of those assets relate to the four virtually valueless share swap companies mentioned in the Chairman's Report. Other investments to which a value was attributed cannot, at this time, be regarded as having any value whatsoever. At the time of writing this letter your directors believe the net asset value of the business to be in excess of £24 million, equivalent to over 10.7p per share. This compares favourably with the mid-market closing price of 2.75p per share when your Chairman, Jack Wigglesworth, and the then Managing Director, George Allnutt, were obliged to ask for the shares to be suspended because of their concerns about their inability to obtain believable figures. It is inevitable that shareholders will wish to understand precisely what has happened to their company since the accounts for the year 2006 were placed before them. I shall now do my best to explain the most significant of those many matters which have troubled your Directors over the last year.

Share Swap Companies

In May and June 2007, LAC announced to the London Stock Exchange that it had issued in total 98 million fully-paid new shares (valued at approximately £10 million) to shareholders in four newly-formed companies, three in Hong Kong and one in Singapore, in return for a 40% interest in those companies ("Share Swap companies"). In each of the four Share Swap companies third-party investors held the remaining 60% interest. In aggregate, these third-party investors paid little more than twenty thousand pounds for their investment, which effectively gave them collectively a 30% shareholding in LAC. In breach of the Companies Act, no valuation of the Share Swap companies was obtained prior to their acquisition by LAC in May and June 2007.

Details of these share issues and of the acquisitions were described in the Audited Accounts for the year to 31st December 2006, and in company regulatory announcements to the London Stock Exchange. Applications were made for the shares to be dealt on AIM and a further review of the acquisitions was made in the 2007 interim results. These interim results showed that these virtually valueless companies were purported to have increased the LAC Net Asset Value by £10.9 million, equivalent to almost 25% of LAC net asset value. It was stated in the 2007 interim results that these Share Swap companies had a "combined capital value of over £27 million." The Audited Accounts of those companies demonstrate little or no value. At all relevant times these transactions were managed by Simon Littlewood.

We succeeded in having the 98 million shares in LAC, referred to above, gifted back to LAC plc and cancelled at a Board Meeting held on 22nd May 2009, resulting in the number of shares in issue dropping from 327 million to 229 million, to the benefit of shareholders and increasing pro forma Net Asset Value from 6.8p to 9.7p per share. LAC is now pursuing claims for up to £16 million against the four 60% shareholders in each of these Share Swap companies for the consideration they failed to pay on their shares. While it is unlikely that these claims will be met in full, we are confident that there will be a significant net financial benefit to shareholders in LAC.


Aborted Acquisitions Not Announced

In May and June 2007 announcements were made to the London Stock Exchange of acquisitions by the above Share Swap companies totaling £12 million. These appeared in the Chief Executive's Report in the 2006 Report & Accounts as signed by Simon Littlewood and as a post balance sheet event note, in which shareholders were informed on various other matters, including:
• China Exchange Limited had acquired an 80% stake in SYGC
• China Exchange Limited had acquired a 40% stake in Xi'an Private Equity Exchange
• London Asia Limited had acquired a 51% stake in Jin Lian Ann Insurance Broker of Beijing
• London Asia Limited had acquired a 51% stake in Zhong Nan Auction House
The 2007 Interim Report also referred to these acquisitions. We are unable to find evidence that these acquisitions took place and they are not recorded in the Audited Accounts of those companies.

The first indication that these acquisitions had not taken place was an email sent on 22nd May 2008 by Simon Littlewood to Moore Stephens, auditors to LAC. No statement concerning these events was made to shareholders until the announcement made in my letter to shareholders on 7th May 2009, which meant that LAC was in breach of its obligations to the AIM market and gave a misleading impression of its financial status.


Loan of $5 Million Written Off

On 7th September 2005 (well before the period dealt with in these accounts, but never previously explained to shareholders) LAC plc lent $5 million to Nourican Adriatic d.o.o., in Zagreb, Croatia. The purpose of the loan was to help Nourican Adriatic d.o.o. provide evidence to the Croatian Stock Exchange (Zagrebaka Burza) that cash needed for a bid to be made by two Croatian companies for Industrogradnja was available. LAC was to receive a fee of US$ 1 million for this loan.

The bid for Industrogradnja was launched on 11th November 2005 at a share price of 650 Kuna at a discount to its market price of 810 Kuna. As a result, only 2,640 shares were tendered for at a total cost of $273,244. It appears that the $5 million loan provided by LAC was not used for the bid and should have been returned to LAC in January 2006, together with the $1 million fee. Sadly, the $6 million has never been received by LAC, nor is there documentary evidence to show that steps were taken through courts in any country to recover this money.

The document transferring the $5 million to Nourican Adriatic was signed solely by Simon Littlewood. A signed contract confirms that the loan was to have been secured by a pledge over 25,000 shares in Industrogradnja d.d., but no signed guarantee or pledge has been traced.


Bank Accounts

In September 2008, most of LAC's funds were in the bank accounts of its foreign subsidiaries and associated companies, under the control of Simon Littlewood and his wife, Josée Lai. Simon Littlewood resigned as a director of LAC on 25th July 2007 and so it was not proper for him to continue to control –to the exclusion of all other main board directors – the Company's cash and investments.

Simon Littlewood failed to tell LAC directors of the locations of many LAC subsidiaries and associated company bank accounts. For example, the LAC directors were told that there were no bank accounts in Singapore, although LAC's wholly-owned Singapore subsidiary, London Asia Capital (Singapore) PTE Ltd in fact had accounts with DBS Bank, Fortis and UOB.
Undocumented Transactions

With the directors of LAC having no control over the subsidiary company bank accounts, your Board was shocked when investigation revealed that large sums of money had entered, left and moved around LAC in a way that was not supported by proper contracts, invoices or proper business practice.

Sums due to one company had improperly been paid to others; in particular, funds due to wholly-owned subsidiaries of LAC were paid into companies in which LAC was only an 80% or even 40% shareholder. Many of the investments, particularly those in China, were held in a way that made it impossible to prove title. Some shares, which were the property of LAC or its subsidiaries, were held by private companies in China, with no adequate contract or other safeguard for the shareholders of LAC.

Substantial Sums Which Passed through the accounts of LAI(HK)

Since March 2006 Mr. Simon Littlewood served until 19th October 2009 on the Board of China Growth Opportunities ('CGO', previously called London Asia Chinese Private Equity Fund plc, which invested heavily in China and Asia, raising and investing circa £50 million.

We have discovered that the cash for these investments made by CGO passed through the bank accounts of LAI(HK). LAI(HK)'s records do not provide full transparency for these arrangements and neither can all such sums be validated.
Commissions received by LAI(HK) from CGO for both managing and investing the fund were paid away and could not all be reconciled from the information available. Pursuant to the cooperation agreement referred to above, LAC asked CGO (including Brett Miller) for details of the substantial commission payments, but in breach of that agreement CGO withdrew and refused to provide further information, frustrating our efforts and further delaying the preparation of the Accounts of LAC.


Diversion of Funds

In December 2007, London Asia Capital (Singapore) PTE Limited ("LAC(S)") was due £1.6 million from China Growth Opportunities plc in respect of performance fees. At the written instructions of Josée Lai, wife of Simon Littlewood, these funds were not paid to LAC(S) but instead to London Asia Fund Management Ltd, a Brunei company in which LAC held 40% of the equity, while Simon Littlewood and associates held the remaining 60% shareholding.
On receipt of these funds by the Brunei company, £401,440 was immediately transferred to each of Simon Littlewood and Joyce Ng. In so far as your Directors are aware, LAC and its subsidiaries have no contractual relationship with Joyce Ng although she has been in receipt of substantial sums from LAC Group companies.


Improper Share Support Activity

Between December 2007 and April 2008, shares in LAC were purchased on the AIM market by the Company totaling 1.9 million shares. RNS announcements were issued stating they were to be held in Treasury. The majority of these transactions were arranged by Simon Littlewood.
Your Directors have been advised that these purchases were illegal because LAC did not have sufficient distributable reserves and was therefore in breach of the Companies Act.

While Simon Littlewood was a Director of Huang He Securities Ltd, one of the Share Swap companies mentioned earlier, instructions were given for the purchase of 2.5 million shares of
LAC in 2007 and 2008. The cash to buy these shares came from London Asia Investments(Hong Kong) Ltd ("LAI(HK)") and thus the transaction was circular. The effect was to artificially support LAC's share price which was
in breach of the Companies Act.

Shares Held in Trust in China

LAC has significant shareholdings in unquoted Chinese companies. It is now clear that, with the exception of Zhongying and Biaoqi Tienfeng, the shares are not held directly by LAC or its subsidiaries but instead are held in trust by a Chinese private company under an informal arrangement with no proper documentation or trust documents. LAC and its subsidiaries may therefore have paid substantial sums in shares for investments where proof of ownership is uncertain.


China Financial Services

China Financial Services ("CFS") was one of LAC's early investments, and paid substantial dividends. CFS provided real-time information on securities and analysis software to support investors to buy in the stock market. We understand that CFS was prepared for a public listing in 2006. As at 30 June 2007 the fair value of this investment of £4.76 million was included in LAC's interim results.

Your Directors have now discovered that in the summer of 2006, the China Stock Exchange announced that it would no longer provide free market data and as a result the business of CFS rapidly collapsed. In calendar year 2006, CFS's revenue was £2.78m and pre-tax profits £1.97m. Based on the information available, the revenue in 2007 was £227,873 and the losses amounted to £1.34m. In the first half of 2008, CFS had no revenue and lost £841,103. It is believed the business has since ceased operating.

In 2007, LAC announcements were made to the London Stock Exchange concerning CFS but none indicated its rapid trading decline. The last statement included in the Offer Document referred to below mentions "the confidence we have in CFS`s expansion strategy". Failure to keep shareholders and the market informed is in breach of the AIM rules.

Sale of Shares in Investee Companies by LAC

On 5th October 2007 London Asia Corporate Finance Limited (a wholly-owned subsidiary of LAC and an FSA-regulated corporate finance company headed by Mr. Simon Littlewood) authorised the issue of an Offer Document, which stated that six LAC portfolio investments valued at £7.7 million were being offered to LAC shareholders at a discounted value.

The Offer Document stated the portfolio investments being sold represented "less than 10% of the LAC balance sheet as at 30th June 2007" and went on to state "should the Offer be taken up in full there will be a realised profit on disposal of over £1.5 million."
Your Board could not reconcile these holdings to the books of LAC and have subsequently discovered that some of the shares offered belonged to third parties. The Offer Document makes no such reference to third parties and indicates that all the shares on offer were owned by LAC and related companies.

On 30th October 2007 LAC announced, "There was a strong level of interest shown in the Offer, with offers made for a total of £3 million worth of shares, out of £7.7 million on offer. The total sold represents 7% of LAC's reported net asset value as at 30th June 2007. Based on the original cost of £1.4 million, the profit on sale against original cost amounted to approximately £1.5 million." Of the purported £3 million sales proceeds, less than £700,000 has been traced. Such failure to keep the markets and shareholders informed is in breach of the AIM rules.

There is more but despite this astonishing list I am pleased to be able to tell you that the future for your company looks far better than it has in some time, whether you wish to have cash returned or to stay with the company now that it is well placed to benefit from the opportunities of China.

Your Chairman through these troubled times, Jack Wigglesworth, has let it be known that he will be retiring at the forthcoming AGM and will not be seeking re-election. Jack has faced great difficulties and has been mislead and frustrated in his task. I wish him well for the future for it is thanks to him that your new Board is in place. At the AGM the Earl of Cromer has indicated that he will be prepared to take over the role of Chairman. Having worked with Lord Cromer over the past year and seen firsthand the impact that his experience and understanding of China can have on negotiations, I am confident that your company will go from strength to strength under his leadership.

As for the future, the first task of your Board will be to prepare the accounts for 2008 and 2009 which we plan to publish early next year. While this activity continues we will progress with Wuhan Kaidi the proposed Tender Offer which will aim to allow those shareholders who seek an exit at 5p per share to sell at least 29.9% of their holding or LAC to raise cash for future development. We will work with Wuhan Kaidi to maximise the value of Zhongying in preparation for eventual flotation and determine the true worth of those other LAC investments currently given no value but which we hope with local expertise may increase our net assets. Finally we will to seek other investments in China to take advantage of the growth of 8% per annum in the Chinese economy and the continuing appreciation of the Chinese currency against sterling.

We will endeavour to restore LAC's listing at the earliest possible opportunity while throughout we will undertake a programme to rationalise the unnecessarily complex structure of the Group. We expect to be able to report progress in all respects by the General Meeting at which the
Report and Accounts for 2009 are presented to shareholders.

Keith Negal
Chief Executive
19 November 2009

[loverat] 29/11/2009 14:33

Just thinking - it's funny how the discussion here moves on. Still that is what I meant when I said that the disussion would be broad and cover a wide range of events. I have to say one of the positives of the LDC and COMG situation is that there are not a huge amount of shareholders and much less who post.

Take a look at the MDX thread - that has a huge following and look at the posts - individuals abusing each other and disagreeing constantly on a wide range of issues. They have a CEO (just like Keith Negal)who seems to be trying to salvage something and bending over backwards to communicate and be open, yet there still some who continue to frustrate his attempts to make it work. What a thankless task it must be.

Same was with the LGB fraud. Two groups of shareholders fighting it out on the BB, an action group, people like Anomalous and Cougar6 trying to get in on the action, three law firms (at least one of which was surplus to requirements) and a recovery specialist who was hindered every step of the way.

Peoples reactions are understandable as large amounts were invested by private shareholders in both companies. LDC and COMG are different I suppose and emotions are not running as high because there is perhaps not as much at stake.

Still, my view in situations like MDX is it is best to keep a calm head and leave it to the people who know what they are doing. Ignore the stirrers and the doomsters. If it is going to get in the way of things working out for shareholders, I would suggest that justice and retribution can be left for another day.