I have started a new approach for those Chinese companies that have stock price of a few cents while their last reported financials were showing that their value was a lot higher than that but who have moved to the OTC because of reporting issues like SCEI. I am trying to buy enough stocks to get to the 5% ownership level, for some of these companies with just less than $30,000 you can reach that. If SCEI went to 0.025 then with less than $30,000 you would own 5%+ of the stocks. The problem is buying the stocks as the OTC is very very low volume, meaning people who own the shares are not willing to sell at this price as they know it's not reflective of the value of the company but over time I can accumulate shares as I have done with other another company so far, still only at only 3% ownership but going up slowly. I am not sharing the name of the company as I do not want to reveal my current target.
When I will get to 5%, I will be required to file with the SEC and state my intent, I will state that my intent is not just for investment purposes but to take control of the company by accumulating over 50% of the shares, this should create a reaction from Management for sure and at least it could create some movement on the stock. We'll see what happens if I can reach this 5% mark. For SCEI, 5% is still relatively expensive at $0.20 you need to invest $235,000 but not huge, if it went to $0.10, I could given that I have already accumulated over 1% of the shares already, go for it. If it went to $0.05, I would for sure try it.
Just trying to show that being a public company even if you are only trading on the OTC has implications for the company and its management and they either decide to go private or fix their issues as if they don't they could lose control of the company.
Alan---very interesting but it would be more realistic if you could lead a large group of longs to accumulate enough shares to do what you want to do alone. It may, at some point, be advisable for us to organize the accumulation of 51% of the shares so that we can force the company to an election of a new board of directors proposed by us--there is at least one long on this board who may have contacts in China that could allow us to conduct a credible campaign and find Chinese nationals who could be nominated to such a board loyal to shareholders.
I have had the experience of being involved in a similar episode where we organized shareholders to attain a 51% ownership of the stock of a company for the purpose of voting down a merger of the company with another---we succeeded in defeating the proposal but eventually gave in and approved a later proposal which was an improvement on the original but not really what we wanted due to a scurrilous maneuver which essentially cut out the legs from under us with scare tactics which we could not defeat. I believe that just the initiation of such an effort might be enough to get Baowen & Co to come to the bargaining table i.e. start talking to us via PR's instead of ignoring us.