In advance of our first investment in 2008, and over this period of time, we had the opportunity to visit LLEN’s facilities in China numerous times, visited their facilities in Seattle, meet with management in both locations, meet with government officials in China, and meet with their competitors. Our investment philosophy is to be extremely selective in our investments, take a long-term approach, and be very careful with due diligence, and we believe, given the amount of time spent with the company, LLEN is no different. Principals of our firm have been owner/operators of coal mines in the U.S. and have also performed business due diligence on the production of LLEN and opportunity for expansion available to the company.
No doubt, the problem lies in the 18th Century business practices still being executed in China. A bank stamp here, a handshake there, and you have what the Chinese call "cooperating" together. Ever been there? Ever done business there? I have and I can tell you first hand this the root of the problem and it will not change and the risk in investing in Chinese companies will not decrease, nor will any confidence ever grow if the Chinese Govt. doesn't "give in" and build some overdue Business Reform into an outdated system.
The problem is they are too proud to bow down to the US, and after 150 some odd companies have been delisted, revoked or BK'ed, they are also angry because some of those companies were actually good companies, only due to these "ancient" business practices and Joint Ventures, they simply couldn't be proven to be healthy, legit businesses. And the "Short and Distort" gang has made literal killing off this for the past 6 years or so and they will not stop until things change. NQ is the new target, and I have not had a chance to delve into it yet but I can assure you that "doubt and fear" has brought the stock down some 45% over the past 5 days and even if they are real, the hooks won't be taken out until the last drop of blood is squeezed out and the shorts finally cover. So, we have a company with real mines, real leases and rights to the coal within, and two wash plants with that are according to IR, one refurbished and the other in operation.
Seems to me it's not worth the fight to heal from the Lee saga and trudge forward, Fong cannot be going back and forth to China every month to oversee things and Ian basically is a signature on the Financials when stated. Get ready for a private deal coming anytime now, the mines, reserves under foot, and leases are worth double what the Market Cap is right now, throw in the 2 Wash Plants and Wholesale contracts and operations and I think you have at least $2.00 a share there...80M.
Also remember the Feds have been investigating the company for over a year and the only thing they could find is a signature issue. 100 percent sure the Feds simply called union energy and Chinese officials to see if Lee should be investigated for this issue and charged. They had wire taps and knew all of the everyday business of llen. The signature of 2008 is all they found!!!