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Orient Paper, Inc. Message Board

  • michael_anderson210 michael_anderson210 Oct 15, 2010 10:30 PM Flag

    The Investigation is Nothing but Positive

    The investigation does have a lot of investors waiting and thus it is not allowing the stock price to go as high as many others have in a short period of time, but for the long term, it is nothing but beneficial.

    ONP will have what no other Chinese small cap has, and that will be complete trust and clarity going forwardm which will reduce future volatility.

    I agree with Daniel, it will make them more valuable and at some point it will deserve a multiple such as those high growing american small caps get. The reason China small caps are so undervalued is because they are out of favor, uncertainty, trust, clarity, not being investor friendly, etc. There are just too many questions with them, even the ones that recovered because they can and probably will drop in an instant. ONP will not have that issue once the report is released because the concerns will be answered and everything they have done, it shows their effort for investors. Do I expect ONP to go to $20 in an instant? No, but with everything cleared and no worries, there is no reason it cannot head towards a P/E of 15 and closer to 20 based on current PPS. Once the report is done, there is nothing anyone can really say against it. Plus, with the clarity and very few to no questions, it will attract large investors as it will continue to still be undervalued for a little while. The main thing is that they cannot leave any questions or concerns about them being fraudulent and it seems as if this will clarify everything.

    Think of CHBT and CSKI, they may have gone back up, but it could be easy to take them down again with several negative reports. Even CCME, it has a huge short interest and it has been crazy volatile without any short negative report. They are still fragile and will continue to be for some time. ONP though will not have those concerns once the report is out

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    • I like Michael's SECOND PARAGRAPH!

    • Couldn't say it better!

    • I am not sure if Waldo is right on that, but it is possible. Deloitte's investigation unit was hired, so they probably just report their findings to the board and management and it is probably their obligation to report the findings whether good or bad.

      Another interesting thing mentioned by Phillydog previously is that Deloitte would be in contact with ONP's auditors to attain info and also for BDO to enure their correctness. So if BDO found anything with fraud due to the investigations it would be their obligation to report it and it is good that they have not issued any restatements or anything in regards to ONP being fraudulent

    • << DT is employed by L&L. They have sole responsibility to the company, not the shareholders. DT is in fact precluded from releasing anything they find to any party other than the client.

      They were not hired to be whistle blowers, they were hired to "assist" the company. Its only in the muzzy heads of the true believers that DT has morphed into an auditor and a vigilant representative of the US investor. >>

      So you're saying that Deloitte would NOT have to report any "fraud" that it might find during its investigation to the Chinese authorities or the SEC.

      You may be right but I find it hard to believe that Deloitte wouldn't have a professional obligation to report any such "fraud" to the authorities. In fact, I would think they would be concerned about opening themselves to liabilities if they didn't disclose such information. It's equivalent to not reporting a crime that you know has been committed.

      Also, I would think that the Directors would have the same liability concerns. If they are aware of "fraud" and don't immediately report it to the authorities and the shareholders (whom they represent), I believe they are opening themselves to significant personal liabilities.

    • DT is employed by L&L. They have sole responsibility to the company, not the shareholders. DT is in fact precluded from releasing anything they find to any party other than the client.

      They were not hired to be whistle blowers, they were hired to "assist" the company. Its only in the muzzy heads of the true believers that DT has morphed into an auditor and a vigilant representative of the US investor.

      John

    • I believe phillydog reported almost seven weeks ago that
      if DELOITTE&TOUCHE who were hired to aid LOEB&LOEB into an
      'independent verification' of the company's books and filings and auditor's report, that D&T report would remain internal to the company.
      He stated that what was reassuring to investors was THAT
      BDO HAD NOT WITHDRAWN THEIR OPINION.
      Since philliydog's commentary, John 'Waldo' Bird has stated
      as did phillydog that the report could remain internal.
      In different posts and after other inquiries, both Winston
      Yen and Sally Yang have responded to the posters that the
      report would be made public WHEN COMPLETED!

    • << I do appreciate your taking on the customer question and I will concede that your inquiry looks better than what I got from the credit bureau. >>

      And how about my question. Wouldn't Deloitte be professionally bound to report any instances of "fraud", that they discover during their investigation, to Chinese authorities and/or the SEC?

      And if so, isn't the fact that such instances hasn't been reported after many weeks of investigation, indicate that there is no such "fraud"?

    • The reason they can't create major deceptions in the filings to the SAIC is because the tax system is VAT. Everysale requires the addition of a VAT fee paid to the government. The purchaser uses the taxes paid to the seller as a credit against taxes they have to remit to the government. It is very difficult to mess with VAT since it requires collusion on both sides. The common misreporting is to create phony sales and inflate the transaction amounts which generates VAT credits.

      I do appreciate your taking on the customer question and I will concede that your inquiry looks better than what I got from the credit bureau. I expect they will be back to me on the added information I sent them by the beginning of next week and I will share the results.

      John

    • << So now, my question is, what evidence do you have that the SAIC revenues (assets, profits, etc.) reported by small private chinese companies are accurate? >>

      Another question. If Deloitte found any evidence of fraud, wouldn't they be obliged to immediately report it to the authorities and not wait to include it in a report to the company? For example:

      - if they found that actual cash on hand was significantly different than reported
      - if they found that other assets or liabilities were significantly different than reported
      - if they found that multiple customers didn't exist
      - if they found that suppliers didn't exist
      - etc.

      Wouldn't the discovery of any of these major differences force Deloitte to report the discrepancy to the SEC and/or authorities in China?

    • By the way, although I am currently long ONP, I am not a True Believer. In fact I will be honest here and say that although I think the MW "report" was without exception the WORST piece of idiotic crap I have ever read, in the course of my own investigation I have found information that leads me to believe that ONP is not 100% innocent. However, when I consider all the facts I have, they tell me the company is certainly worth more than $4 per share, and maybe as much as $10. But if I had new facts that made me think my lower bound of $4 was actually the fair value, I would sell and move on. I think the longs and shorts, rather than being emotional enemies, actually help each other, as I have helped you with your credit checks, and as you have helped me with the info you provide (e.g. on Dongfang). My background is in science, and I have found that usually when people think they are disagreeing about truth (i.e. facts), what really separates them is not the facts but the unstated assumptions they use to interpret those facts.

      So now, my question is, what evidence do you have that the SAIC revenues (assets, profits, etc.) reported by small private chinese companies are accurate? Or do you simply take SAIC numbers on faith? Because once again, there is what appears to be convincing proof that SAIC filings are not reliable, and this time it is staring you in the face.

      thanks.

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