Pretending for a moment that the conclusion could safely be drawn that this stock is definitely going to move up, it would still be necessary to know from what price to calculate the risk involved. If the hypothesis at the beginning of the week, around $6 was "oh, it will move up" are there people on here who really haven't changed their view as it falls around 4.25?It is a major problem for anyone playing a bounce now is that the chart shows and anyone holding the stock has seen a dramatic freefall over the past few weeks. That requires one of two things: longs selling or shorts jumping on, either one of which presents a losing scenario for longs and reduces the likelihood of a bounce. No news is not good news if you're expecting a rebound.
ONP has accounted for taxes in their latest 10K:
Once the audit is complete we'll know if their currently filed numbers are correct. My hats off to them for seeking a Top 4 auditor to resolve the open issues. If their numbers are correct, this stock will take off and if they are not, it will plummet.
Don’t give up your day jobs as your investigative reporting sucks
Not long ago China did not allow foreign ownership. So to by pass and gain access to this growing economy the lawyers and accounts were paid a chunk of change to find a loophole or six. ONP used this one offshore entity can be set up with a Chinese subsidiary that enters a management contract with the operating business. Because technically the offshore investors don't own what they are investing in,this technique has been used to funnel foreign money into sectors where foreign ownership is forbidden. But it has also found much wider application. Orient Paper Inc., which trades on Amex, is an example. For you kids that want foreign exposure the rules change often and vary from country to country. If China is your area of interest you better know why they trade at a low multiple in the Western World. http://www.law.umich.edu/newsandinfo/Documents/Chinese%20Offshore%20Structures.pdf
I might be long but if you want to bark up a tree or find the smoking gun it will not be hard to find Andrew Worden http://www.nytimes.com/1990/03/16/business/sec-files-fraud-charges.html or sewer pipe WILLIAM P. WELLS have a history with Muddy waters WAB dad and so far not so loud Fool co-founder Tom Gardner
Kids you should know foreign taxes before you learn a stock chart. You should also know common sense. I own a business that is incorporated and has offices in 3 countries and one being our democratic US. Can you please tell me what office would go to to get my business tax records? Now think freedom of information and then think what office in a communist country do you know of in China allows access of information. If you can think just ask google about China and information access.
I would think most of us are just confused as to what is going on. I know I am.
Alright, so let me get this straight. You are implying that there is no issue, but rather the reporter just discovered the loophole that was used to get around foreign ownership?
And I don't really get your last paragraph. It isn't particularly helpful to just ask rhetorical questions. Pray tell, where WOULD someone go for the tax records? Did the reporter get it wrong and went to a place where taxes records would be released?
Disclosure - Long
I've long been suspicious of Chinese reverse merger companies for exactly the reasons outlined in the Michigan article. You have to worry about:
1) Are the entrepreneurs crooks, not only because of high fraud levels in China but specifically because the reverse merger technique leaves the criminal in a jurisdiction where his crimes cannot be prosecuted by the victims (i.e., US authorities cannot touch a Chinese national doing business in China)
2) Is some idiot in the communist party going to wake up and have a random impulse to change a regulation that then renders all of the contracts that are the basis for your holding company existing invalid.
Clearly the Chinese authorities need to form a separate exchange that is made completely open to outsider investors and stop their paranoid restrictions on outside investments.
And on the US side probably we need much stiffer regulations preventing loosely structured holding companies from trading stock for assets they don't actually own.
The reporter is asking very very difficult questions, and the answers he got from ONP are not completely verifying. What's really interesting about this report is that the Chinese are focusing on this as a tax evasion issue and not so much from the perspective of a stock fraud.
So, for example, the reporter in that article goes to the local tax authority and finds discrepancies between what ONP reports to investors and to tax authorities.
ONP explains to the reporter that some of its income is coming from facilities it doesn't own. The details of that are not clear, but it seems strange.
The reporter says "But our reporter in Beijing, under the Bureau of Enterprise Trade and Industry Information Network, made a query and the name or names containing "Oriental Paper" field in the book business does not exist. There are no qualified companies with the legal representative registered to the name "Liu Zhenyong" opening businesses."
You have to love the free press, even in a communist country. There is no smoking gun in the article, but the reporter is repeatedly making the point that the facts don't add up in their current form. And you very much get the feeling that they are going to be bulldogs and now come at ONP from the Chinese side with additional questions and articles. Call that article Round One for the Chinese press.
I guess one outcome to all of this would be that they were honest to investors and dishonest to Chinese tax collectors. They clearly aren't enjoying the attention.
I am not sure what to get from this. But it is pretty certain that ONP was doing some tax evasion accounting, which seems to be the source of any financial discrepancies for the stock fraud. It is fairly common practice, but that doesn't excuse it.
Now all the question is whether they confirm that 1) It is tax evasion 2) Stock fraud 3) Both.
I am more on the side that they have the production capacity, and some of their net profit is high due to evading the tax man.
Changing my sentiments to hold.
Glad to see that was someone else's take on those Chinese articles. They were avoiding the taxman in Bejing. Don't think it's an unusual way to do business over there from following paper trails on some Asian stocks. Don't know if the Chinese authorities will do much in a 'legal' sense as I think a good part of China, this is business as usual. I guess when that guy (sorry don't know his name, but enjoy him), from wsmco said it's like the old wild west, it is. Necessity is the mother of invention, certainly applies. I kind of summed it up in my own head after reading a number of reports, that when you see the pr's coming from Asian companies, it's not what is, but what they hope it will be in 10 years time. I guess if you went back in history to our own ancestors, you'd find many similarities.