
Yangtze River Port and Logistics: On-The-Ground Research Shows Assets Fabricated - ilamont
https://hindenburgresearch.com/yangtze-river-port-logistics-total-zero-on-the-ground-research-shows-assets-appear-to-be-largely-fabricated/
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rrggrr
In 2006, during my second of many trips to China, I had the chance to have
dinner with a banker in Beijing. A quintessential 洋鬼子, I was stunned to learn
at the time that many of the loans being underwritten were based on valueless
collateral and I expected the correction and liquidation of the century to
occur any day. Almost 13 years later and I am still waiting for the
correction. I know its coming, and I know it will be epic, but I can't tell
you when. I view recent disappearances in China and various crackdowns on
dissent as indicators the time is near.

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agumonkey
which disappearances ?

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denom
[https://www.nytimes.com/2018/12/08/opinion/sunday/lu-
guang-p...](https://www.nytimes.com/2018/12/08/opinion/sunday/lu-guang-
photographer-missing-china.html)

“For five weeks, the world has had no idea where Lu Guang is.”

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kccqzy
The company's response to this report: [https://www.ajot.com/news/yangtze-
river-port-and-logistics-l...](https://www.ajot.com/news/yangtze-river-port-
and-logistics-limited-refutes-hindenburg-researchs-report)

It's very vague and to me it doesn't inspire any confidence at all.

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jorblumesea
Stories like these are going to become increasingly common. Chinese companies
are completely opaque and the SEC cannot easily audit Chinese companies. It's
easy to rip off Western investors as the power structures lean towards Chinese
citizens, always. Their entire business structure is built with the Chinese
first and everyone else second.

SEC statement: [https://www.sec.gov/news/public-statement/statement-vital-
ro...](https://www.sec.gov/news/public-statement/statement-vital-role-audit-
quality-and-regulatory-access-audit-and-other)

~~~
zachguo
Is there any special treatment to allow Chinese companies doing this? If not,
I'm afraid this kind of fraud would apply to many business across the globe.
Proper conclusion drawn from this incident is that loophole revealed in such
case should be fixed to protect investors.

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kaiwen1
The Chinese feverishly discover and exploit every scammable niche imaginable,
both illegal and legit. This appears to be key to their success. This scam
will tank, but the mentality and culture that produces it drives the entire
country forward at break-neck speed.

~~~
forkLding
I wouldn't attribute to a population what can only be attributed to one
individual, the company chairman. Does the Enron scandal prove all Americans
are scammers for profit gain and will manipulate their values like Anderson's
auditors? No it only proves that there exists some in American society.

~~~
awakeasleep
I agree with your point but the Enron example contradicts it. One of the
biggest lessons of Enron was that nearly every part of our financial system
was complicit in the corruption.

There were all those things like Glisan's scheme to sell Enron assets to
Osprey- all the credit rating agencies rated Osprey, and all the major
institutional banks invested. I don't remember the names of the other shell
company refinance schemes, but there were multiple.

Then there was the bragging in financial press how Enron could raise money
using innovative financial vehicles that didn't issue stock or take debt in a
way that had to be reported to the street.

Thats bad enough but the leasing shell game that was a part of that couldn't
have worked without leasing the tankers to the banks.

Anyway, I think the majority of people are honest and hard working, but whole
industries can definitely be corrupt and depraved.

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curiousDog
One of the many reasons I’d never invest in a Chinese company HQ’ed over
there.

~~~
chrischen
Worked out for Yahoo and Softbank and their Alibaba investment.

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stdplaceholder
The incredibly tight range over which this stock has traded, on low volumes,
over the last 4 months is pretty suspicious.

~~~
jason_slack
yeah it sort of dropped from $13.xx to $10.xx up to $11.xx for a long time and
now down to $8.xx and I suspect going lower.

There was another trend between 2015 and 2017 where it also was tight trading.

This was actually the reason why I bought stock was because I could buy when
it went low, sell when it went up and turn around and buy again and again on
the lows. Rinse and repeat this cycle. It worked pretty well until now.

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momentmaker
This is the whole premise of the China Hustle:
[https://www.thechinahustlefilm.com/](https://www.thechinahustlefilm.com/)

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i_am_proteus
cf.
[https://en.wikipedia.org/wiki/Potemkin_village](https://en.wikipedia.org/wiki/Potemkin_village)

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1024core
So what's stopping someone from shorting YRIV?

~~~
viraptor
Before? Nothing. Now? If you can find anyone who will let you enough shares to
short in a meaningful way, you can do it. But you need someone betting the
other way, which is not going to be that popular once the article is public.

~~~
1024core
Dammit. Could have sold them for ~ $8.75 when this came out. It is $4 now. :-/

[https://finance.yahoo.com/quote/YRIV?ltr=1](https://finance.yahoo.com/quote/YRIV?ltr=1)

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jason_slack
Damn I own stock in them.

~~~
berberous
Out of curiosity...why? As part of an index fund or directly?

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crb002
Vanguard is going to have to start conducting independent audits.

~~~
wbl
Why? The whole point of indexing is not to do that. Feel free to move your
money to an active fund that tries to catch out companies with lies on
financial statements.

~~~
wavefunction
Or perhaps an indexing that does.

~~~
wbl
That would be active management

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PRmaestro
I would not be surprised if mortgages from Puerto Rico held by the US Treasury
or on the balance sheet of banks were for homes that do not exist either. The
government of Puerto Rico is known to be corrupt and has changed the measured
distance of many roads on the island at least 2 times in the last ten years.
This correlates with when the US treasury window was open to MBS paper
exchanges at par value.

~~~
reaperducer
I know you're being downvoted for being off-topic, but I'd like to know more
about this:

 _The government of Puerto Rico... has changed the measured distance of many
roads on the island at least 2 times in the last ten years._

I ask as someone who has to sometimes locate addresses on maps of Puerto Rico,
and occasionally has problems doing it.

~~~
PRmaestro
Every public road in Puerto Rico is kilometre marked as highways in the US are
mile marked. Addresses to property are then designated by the km sign they are
nearest too. From what I can tell with my limited Spanish ability, the legal
address of the property is based on this as well. The government here decided
to remeasure and mark these roads twice in the last ten years, effectively
creating an entire new set of legal addresses for many roads that cross the
entire island.

~~~
reaperducer
And how is that corrupt? Renumbering happens a lot. Even a big city like
Chicago was renumbered twice.

~~~
PRmaestro
The simple act itself is not corrupt. Illinois' budget is also in a financial
hardship, from what I have read. In my own reasoning to answer the question
of, what is behind making a change to legal addresses like that. The only
answer I have come up with based on the opinions I have heard of corruption in
the government, is that it would be nessecary to fabricate entire MBS or parts
of MBS, that then could have been sold to the treasury at par value. The
address changes happened while they were accepting the 4 trillion plus, in
mortgage backed securities that they now hold.

