Origin Agritech's Seedy Past Could Affect Future

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Swimming In A Perilous Pool by Leslie P. Norton

Highlighted companies: Origin Agritech (SEED)
Summary: While Chinese stocks were shooting up 100% last year, Origin Agritech's (SEED) shares fell 14.5% to $10.94, to a $250 million value. Possible reasons? 1) General fallout from the Amaranth hedge fund collapse. Amaranth owned Special Purpose Acquisition Companies (SPAC's) similar to Origin, putting all SPAC's in disfavor. 2) Company blunders like filing its December 2005 annual report four months late, changing revenue recognition rules, shifting to a September fiscal year, firing its auditor and holding the annual shareholder's meeting in Beijing, when the stock only trades in the U.S. 3) A look at the checkered ethical and legal past of Richard Propper, who headed Chardan China Acquisition when it acquired the seed company and changed its name to Origin: Charges of insider information while at Montgomery Medical Ventures, an SEC settlement over failure to disclose holdings and transactions in public companies and a recent suit against Propper and his partners for defrauding the Small Business Administration of $32 million. Origin enthusiasts include its CFO Jeff Wang, who says revenue by June 30 was $65 million, sharply higher than five years ago, sales are growing and acquisitions are a focus. The Maxim Group, backer's of Origin's IPO, says shares are worth $21, and Propper says earnings will be up significantly in '07 as well. Bottom Line: Its fans say Origin could be worth $21, but legal woes could drag the stock down further.
Related: Avoid the PowerShares China ETF Due to Reverse Mergers; Buy the iShares China ETF Instead; SPAC Deals: A Way to Gain Exposure to China (CNCAU, CSCAU); Special Purpose Acquisition Companies (SPACs): How Sound of an Investment?; For more on our special coverage of China stocks

Comments

[trademan:]

This article is based on OLD news and innuendos. For example, Jeff Wang is NOT the CFO of Origin Biotech. He was replaced by Veronica Chen effective Dec 15th, 2007. Ms. Chen, 41, has more than 20 years of experience in international accounting, finance, and management, including five years at a U.S.-listed public company. Ms. Chen will replace Jeff Wang, who resigned as Chief Financial Officer to pursue other interests.

Why does the author talk about Chinese agriculture stock's shooting up 100% last year and then talks down SEED while obviously implying 50% recent runnup is the target of her article?
Sounds to me like a feeble attempt by a DESPERATE SHORT.

2008 Jan 06 03:10 PM