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  • riterifff28 riterifff28 Jul 24, 2012 5:37 AM Flag

    You will win this battle HOWEVER

    Read this VERY CLOSELY...If you do not understand what this means you should run very far away from Chinese adr's!!!

    Second, EDU is an asset heavy VIE. In its last published financial statements, EDU reported that it had 62% of its assets and 97% of its revenue in the VIE. One of the requirements for consolidation is that the public company has an interest in the residual profits of the VIE. In the case of EDU, as is the case for most VIEs, the interest in residual profits is obtained through technical service agreements that allow the public company to extract the profits from the VIE through fees. Many VIEs do not appear to be making those fee payments, leaving all of the profits to accumulate in the VIE. That raises the question of whether the public company actually has an interest in those profits. If it does not take them out by following the VIE agreements, how does it plan to ever get those profits to the shareholders?

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