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At GEO, our focus is on providing high quality insights on mid and micro cap equities, both in the China and U.S. spaces. Since our inception, we have come to be known by our GeoBargain selections, a group of stocks with a specific set of criteria that has proven to help them perform better than... More
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  • GeoInvesting Stands by its Claims that L&L Energy does not Own the Ping Yi Mine: More Color Added 17 comments
    Jan 20, 2012 1:15 PM | about stocks: LLEN

    We understand that some investors have attempted to discredit our research, observing differences between the mining permit number/address on the official Ping Ying Mine chopped business license and Mining Permit compared to web sites posting disclosing the sale of the Ping Yi Mine. Conclusions based on this observation are baseless.

    The Mining Permit number issue in no way unsubstantiates our findings. Our research is based on a mountain of findings.

    1. Our research was performed using the official Business License and Mining Permit posted by the owner. Website postings are secondary to our conclusions, except for the sale information itself.
    2. We have obtained an official chopped SAIC filing of the Ping Yi Mine that clearly shows that LLEN does not own this mine.
    3. Most importantly, the press release issued by LLEN on Jan 17, 2012 states that, "Regarding the sale notices mentioned by GeoInvesting in its article, the Company never authorized or prepared such sale notices. Accordingly, the Company does not know the source of such notices." In other words, it does not dispute that the Ping Yi Mine is for sale.
    4. The only issue regarding the difference in addresses is that the owner refers to the older address of Ping Yi Mine (we will address below).
    5. We note that outside of a possible typo or human error regarding the Mining Permit number, there are no discrepancies in our argument about the ownership of Ping Yi Mine.

    We stand by our conclusion that LLEN does not and never did own the Ping Yi Mine. Investors who do not embrace this conclusion are grasping for strings and playing a dangerous game.

    For more detail on the mining permit and issue about the address, please read the following explanation:

    In this detailed sales post, the sale representative posted the map of Ping Yi Mine, the business license of Ping Yi Mine and the Mining Permit of the Ping Yi Mine (http://www.worldmr.net/Exhibition/ForeCastList/Info/2011-10-11/112458.shtml). The Mining Permit is as follows:

    Ping Yi Mining Permit

    The first paragraph of the introduction of the Ping Yi Mine in the same sales post states:

    "平关平迤煤矿位于盘县平关镇三道沟境内,距平关约10Km ,有简易的公路相通,距红果镇约25 Km,交通较为方便。根据贵州省国土资源厅颁布发的采矿许可证(证号:5200000711358)划定的矿界,采矿权范围由8个拐点圈定,矿区面积为2.2694平方公里,开采标高2250m-2100m。"

    Translated into English:

    "Pingguan Ping yi Mine locates at Sandaogou, Pinguan town, Pan County. It is around 10 km away from Pingguan and there is a low level paved road links Pingguan to the Mine. It is around 25 km away from Hongguo twon and the transportation is very convenient. Based on the mine map in the mining permit issued by Natural Resource Bureau of Guizhou province (No. 5200000711358), eight coordinates defines the scale of the mine with the 2.2694 m2 and the exploration depth is 2250-2210 m."

    Apparently, there are two discrepancies between the web sales posting of the Ping Yi Mine and the posted business license and mining permit of Ping Yi Mine.

    "Sandaogou Pingguan Town" vs. "Yiche village, Pingguan Town" in the Business License

    "No. 5200000711358" vs.  permit number Ping Yi Mine

    In the SAIC file, there is a corporate change page as follows:

    Ping Yi corporate change

    This corporate change clearly explained that the Ping Yi Mine moved from Sandaogou to the current address, Yiche village. It is reasonable to believe that when the owners wrote the sale posting, they made a mistake and used the old address on the sale post.

    When the owners wrote the sale posting, they used the Mining Permit number "No. 5200000711358", rather than the permit number Ping Yi Mine , which Ping Yi Mine obtained on Aug. 2008 and is disclosed in the official mining permit in the same sale posting. There are several reasons for this mistake:

    1. A typo
    2. Before Aug. 2008, Ping Yi Mine had another Mining Permit, which may have carried the number "No. 5200000711358".

    This does not debunk our finding that LLEN does not own Ping Yi Mine, which is clearly shown in the SAIC file.

    Stocks: LLEN
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Comments (17)
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  • The GeoTeam
    , contributor
    Comments (389) | Send Message
     
    Author’s reply » Yes, off-topic comments will be deleted. This is not Yahoo.
    20 Jan 2012, 02:27 PM Reply Like
  • TCunnings
    , contributor
    Comment (1) | Send Message
     
    There is a time and a place to acknowledge to possibility that you may not be 100% correct.

     

    This might be the time.
    21 Jan 2012, 10:11 AM Reply Like
  • CoolWatch
    , contributor
    Comments (188) | Send Message
     
    Like I told GEOInvesting a couple day aga, my DD on thier DD is far from over.

     

    I am now half way done my DD on GEO's latest response: GeoInvesting Stands by its Claims that L&L Energy does not Own the Ping Yi Mine: More Color Added and will post my comment and findings to you longs & shorts for review.

     

    STAY TUNED AND DON'T GO AWAY!
    21 Jan 2012, 11:33 AM Reply Like
  • CoolWatch
    , contributor
    Comments (188) | Send Message
     
    The Year of Dragon or The Year of Drag On?

     

    I am not particularly interested in the reasons of differences GEO tried hard to convince the readers on January 20, 2012 why it was not errors but the way that GEO has developed the story since January 13, 2012 is worth noted by longs, shorts or even enforcement agents.

     

    What GEO allegedly has attempted to achieve is as follows:

     

    Creation of Artificial Problems

     

    GEO has in those articles contained links and posts to demonstrate source rather than to point to provide any valid verifications.

     

    Ping Yi mine Issue – GEO started off the issue by questioning “Who Really Owns the Ping Yi Mine: L&L Energy or a Private Chinese Investment Group?” on Jan 13, then confirmed the issue as a problem with article “Conclusive Proof that L&L International (LLEN) Does Not Own the Ping Yi Mine” in the subsequent trading day (i.e. Jan 17). In order to complete the creation of the artificial problem, GEO gives readers “Recordings & Transcripts Provide that L&L Int (LLEN) Never Purchased the Ping Yi Mine” on Jan 19.

     

    Spread of Misinformation and/or Incomplete Information

     

    Spreading questionable information and discouraging readers from requesting the original source, regardless of the relative merits.

     

    The SAIC file of the Ping Yi Mine shows that the Ping Yi Mine is currently held by a private investment group, rather than the LLEN subsidiary. The group is said to be led by Mr. Hu Shiwei and is currently offering the mine for sale in China.

     

    GEO appears unconcerned the need to contact any of the partners of Ping Yi Mine for a direct & valid verification of such sale offer. When nothing is verified, readers may not within a reasonable time be able to find out if there is any intention to sell at all, not to mention their right to sell (please refer to Proxy Agreement, Option Agreements & Equity Pledge Agreements)

     

    Reinforcement of Investors' anxiety

     

    GEO is so keen on escalating investors’ anxiety by creating doubt “WHO REALLY OWNS” the Ping Yi mine on Jan 13, then stressing that LLEN “DOES NOT OWN” the mine on Jan 17, and reinforcing fears that LLEN “NEVER PURCHASED” the mine on Jan 19.

     

    GEO reinforced investors' anxiety over SAIC file of Ping Yi mine, and suggested that LLEN’s SEC filing are not to trust, and that “LLEN shares are not investable and pose an extreme risk to long investors.”

     

    Association of Conversation with “Related” Party to instill fears

     

    We do not understand what bases GEO had to leave it no doubts that Mr. Wu was the fit and proper person the research company would solely rely on his information, knowledge, opinions or conclusion towards LLEN, Ping Yi mine and its registered partners. GEO insisted in using Mr. Wu’ s transcript as solid evidence against LLEN without contacting the investment group, any one from the group or sending questions to LLEN for clarification is seen as an effort to appeal to longs’ fears and to encourage readers to short.

     

    Destabilisation of Investors’ confidence

     

    The Call with Mr. Mr. Zhao Weijun, Vice Director of the Guizhou SAIC office – General enquiry with no specific reference to Ping Yi Mine

     

    Not only GEO refers its experiences in the China RTO space and compares LLEN valuation & with China RTO sector but also mentions governance frauds like YUII and PUDA in the articles. I suspect its intention is to use FUD to destabilise longs confidence, and thus get a better deal for covering its short position.

     

    According to WIKIPEDIA, Fear, uncertainty and doubt (FUD) is a tactic of rhetoric and fallacy used in sales, marketing, public relations, politics and propaganda. FUD is generally a strategic attempt to influence public perception by disseminating negative and dubious/false information designed to undermine the credibility of their beliefs.

     

    I would leave the readers to determine if it is a coincidence or not that GEO has been using FUD tactics against LLEN.

     

    Further Queries on GEO articles

     

    In the article “Conclusive Proof that L&L International (LLEN) Does Not Own the Ping Yi Mine”, GEO mentioned that the Ping Yi mine is owned by an investment group of four Chinese nationals led by Mr. Hu Shiwei and the group is currently offering the mine for sale in China.

     

    My questions:
    Did GEO duly verify that content of the web ads had been properly approved and authorized by the investment group?

     

    What makes GEO so sure that Mr. Hu Shiwei represents interests of all members of the investment group? Would it possible that he only represents himself only?

     

    It is stated that "To ensure that our (SAIC) documentation is accurate and up-to-date, we called the sales agent listed on the website". I do not query Mr. Wu may have assess that provided him some information and data of the Ping Yi mine.

     

    My questions:
    Mr. Wu appears to GEO as the sales agent. Is that the reason that made the research company so confident that information and data (such as Ping Yi Mine, the business license and the Mining Permit of the Ping Yi Mine) provided and or posted by Mr. Wu were most update, complete & accurate and without bias?

     

    On what grounds did GEO have to believe Mr. Wu is the only source of verification? Did it ever occur to GEO that other sources of verification are necessary?

     

    In the article “Recordings and Transcripts Provide Conclusive Proof that L & L Int (LLEN) Never Purchased the Ping Yi Mine”, GEO’s statement “Conversation with Mr. Zhao Weijun regarding the different dates on THE SAIC file.” is misleading.

     

    My comments:
    Mr. Zhao does not dispute the enquiry made by GEO regarding the different dates of a SAIC file on no company name basis because Mr. Zhao never had any knowledge or never authorized the general answers he provided during the conversation with GEO would be quoted and referred as specific answers to a particular SAIC file. This is why we see that Mr. Zhao in reply to GEO’s questions provided general example to help GEO understand his answer. Accordingly, Mr. Zhao offers no specific answers to THE SAIC file as stated by GEO.

     

    If GEO is to make the same enquiry along with Ping Yi mine as the subject with Mr. Zhao this time, I bet GEO will not have the same or straightforward answers like it had the last time.

     

    In the latest article “GeoInvesting Stands by its Claims that L&L Energy does not Own the Ping Yi Mine: More Color Added”, GEO prematurely concluded that LLEN does not dispute that the Ping Yi Mine is for sale because the Company said "it never authorized or prepared such sale notices. Accordingly, the Company does not know the source of such notices".

     

    My comments:
    If something is for sale, it becomes reasonable and logically true that an ad or sale notices will be put up. Contact person of that ad or sale notices would therefore undoubtedly is a valid sales representative. It seems to me GEO has been trying hard to establish such logic in order that Mr. Wu is the right person to talk to and that any information and data from him ought to be reliable, accurate and most current.

     

    In the article "Who Really Owns the Ping Yi Mine: L&L Energy or a Private Chinese Investment Group?", GEO provided a TWO-page SAIC file of Ping Yi mine which it claimed to have obtained with the official chop of Guizhou Province SAIC Office. And now in the latest report GEO has surprised us again by disclosing a THIRD PAGE (the corporate change page) of the SAIC file of Ping Yi mine.

     

    My questions are:
    Is the corporate change page obtained by GEO ALSO from the Guizhou Province SAIC Office and on the SAME date too?

     

    Why has GEO now more than two pages from the SAIC file? What are the reasons to keep the research company from disclosing the complete SAIC file from the readers (if they are from the same date and same source)?

     

    How many pages are actually contained in the SAIC file of Ping Yi mine which GEO claimed to have obtained from the Guizhou Province SAIC Office?

     

    Is GEO going to scan and post the COMPLETE SAIC file at all? I have repeatedly made such requests to GEO for I got the feeling that its SAIC file is of QUESTION. Hope GEO does not turn me down this time.

     

    Quality of OTGDD is of question

     

    GEO seems proud of its strong on-the-ground evidence as well as its philosophy to provide quick, concise and efficient research instead of the pages and pages of information indicative of most research reports. From GEO's recent articles, mass majority of readers have been given thumb down by as to the quality of works put in despite these articles were consistent with its theme, not long but time & cost effective.

     

    Ignorance or Innocence
    GEO denies LLEN’s interest in Ping Yi mine and purposely ignores the following facts:
    a) LLEN has taken Effective Control of the mine operation since its acquisition.
    b) The Company during the third quarter of 2010 assumed a loan agreement approximately $2,307,870 with bank in China (interest rate 9.7% p.a., maturity on Feb. 26, 2012) to finance part of its acquisition of the Ping Yi mine.
    c) In June 2010 the Company completed the construction of and opened the Ping Yi coal washing plant near the Ping Yi mine to wash coal from the Ping Yi mine as well as from third-party mines.
    d) During the first two quarters of 2011 mine development, ventilation and electrical system improvements for the PYC mine and building of staff quarters, and construction of a sewage treatment system and road expansion for the washing facility were made.
    e) On-site visit including Ping Yi mine and washing facility was also arranged in April last year for investors and analysts.
    f) The Acquisition Agreement was not completed as expected in June 2010; however, as of April 30, 2011 there was no outstanding payment for acquisition for Ping Yi mine.

     

    Company Information Search of the SAIC file shows contact addresses of all partners of Ping Yi Mine. GEO appears unconcerned that its DD team may need to contact them to verify the web ads, Mr. Wu’s identity & agency relationship and the most update status of the Acquisition Agreement they have with LLEN’s subsidiary (they ALL are the parties to the agreements)

     

    Confusion with Classification of LLEN

     

    In GEO articles it refers and compares LLEN with companies from the China RTO space while in its website (geoinvesting.com) LLEN is categorically showed as US Stock Alert and China Stock Alert under the GEOAlerts. Maybe GEO has difficulty in differentiating the two categories since day one of work and lost the ability to look at the issue rationally?

     

    Secondary research adopted by GEO in OTGDD

     

    Secondary sources (e.g. information and data of web ads, recording and transcript of Mr. Wu) were mainly use for collection of data as proofs against LLEN and as a result, GEO had to make further explanation with readers on Jan 20, 2012 over the errors and sloppy work they did in the previous articles.

     

    As GEO has demonstrated its research & DD work were primarily based on secondary sources. I would give the research company a chance to answer my questions as below to prove that I am wrong:

     

    Did GEO’s team physically visit the Ping Yi mine (such as spot check) and talk to mine workers or office staff there? Did they not see or ask to meet with any LLEN's staff there to see if LLEN or only the mine owners were operating the mine?

     

    Has GEO’s team conducted any other on-the-ground (DD) activities in GuiZhou, China to gather evidence that LLEN does not own Ping Yi mine? Has the team completed and analyzed their findings to share with us yet?

     

    Could GEO let us have its research / due diligence guidelines so that readers can follow through and hopefully help us to have better understanding of what, why and how its data are collected, opinions are formed, and conclusions are reached.

     

    Conclusion & Suggestion

     

    GEO has thus far issued FOUR reports in FIVE trading days to tell readers that LLEN never owns the Ping Yi mine. Unfortunately, those report offer more questions than answers.

     

    Most queries are in relation to GEO’s quality of research work, principles and methodologies of on-the-ground due diligence the research company performed on LLEN. It seems to me that GEO has ended up spending money to put a solution in place that can demonstrate no value but attempts to deploy FUD tactics for its own purpose. To clear readers’ doubts, I urge GEO that it should further disclose to the public any changes in its Short Position in LLEN at the time of each article it issued, respectively on January 13, 17, 19 & 20, 2012.

     

    LLEN has been established and in business since 1995. Sure it has not been a smooth path for Dickson Lee to survive and grow the Company to the size of today but the market knows LLEN is in critical stage to transform further itself into a coal business vertical integrator and coal mine consolidator in Southwestern China. While the road ahead is still bumpy, LLEN is and will still be being hostile by flies with orchestrated effort to feather their own nest by capitalizing on the attacks for some unethical returns. With the world class board members and senior management that it has gathered today, the Company continues to have my good faith and support in the Year of Dragon.

     

    On the other hand, I believe it is a Year of The Drag On for GEO still it reexamines its business philosophy, research methodology, business integrity and shakes up its management for good to regain creditability from the investing public and communities.
    23 Jan 2012, 09:40 AM Reply Like
  • The GeoTeam
    , contributor
    Comments (389) | Send Message
     
    Author’s reply » You too shall stay tuned. ty-.
    7 Feb 2012, 10:12 AM Reply Like
  • Parker2
    , contributor
    Comments (67) | Send Message
     
    Securities Exchange Act of 1934: Rule 10b-5 -- Employment of Manipulative and Deceptive Devices

     

    It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

     

    a. To employ any device, scheme, or artifice to defraud,

     

    b. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

     

    c. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,

     

    in connection with the purchase or sale of any security.
    7 Feb 2012, 10:39 AM Reply Like
  • CoolWatch
    , contributor
    Comments (188) | Send Message
     
    I look forward to getting your disclosure to the public any changes in its Short Position in LLEN at the time of each article it issued, respectively on January 13, 17, 19 & 20, 2012.
    8 Feb 2012, 06:33 AM Reply Like
  • The GeoTeam
    , contributor
    Comments (389) | Send Message
     
    Author’s reply » short, short, short & short, short (LLEN)
    8 Feb 2012, 11:10 AM Reply Like
  • CoolWatch
    , contributor
    Comments (188) | Send Message
     
    Need more time to provide me answers?
    8 Feb 2012, 11:14 AM Reply Like
  • CoolWatch
    , contributor
    Comments (188) | Send Message
     
    Have your team started the OTGDD on the Union Energy yet?

     

    And have you been able to get hold of Mr. Wu for a meeting after CNY as mentioned the last time?

     

    Are you aware of any new ad online for sale of Union Energy? Well, just curious.
    9 Feb 2012, 07:07 AM Reply Like
  • The GeoTeam
    , contributor
    Comments (389) | Send Message
     
    Author’s reply » Funny...everything you talk about in this post could relate to $LLEN

     

    stay tuned
    9 Feb 2012, 02:41 PM Reply Like
  • The GeoTeam
    , contributor
    Comments (389) | Send Message
     
    Author’s reply » Bob is real. As said before, we need to protect the identities of our team, and even more so now since local authorities are starting to use physical violence against DD teams.

     

    "Isn't that illegal to sell a service to subscribers that does not exist?" The only illegal act taking place here is from LLEN.

     

    We do have an otgdd team in China (just like you do), as well as one in the US.

     

    "Geo's puts already expire in January, hence their attempt to manipulate stock that month aggressively. Putting out news without going to premiums subscribers first etc." We stated that we were short weeks before our report.

     

    It's actually too bad that you have to lace your messages with sarcastic falsehoods and off-topic remarks. Otherwise, they wouldn't be deleted.

     

    Looking forward to your professionalism from here on out.

     

    Stay tuned.
    9 Feb 2012, 03:02 PM Reply Like
  • CoolWatch
    , contributor
    Comments (188) | Send Message
     
    You do have an otgdd team in China? Do you mean your team outsources the work to some people to perform the OTGDD?
    10 Feb 2012, 06:52 AM Reply Like
  • Parker2
    , contributor
    Comments (67) | Send Message
     
    Funny that you would reply to this outlandish comment and ignore my simple question as to whether you've actually physically been to Ping Yi?

     

    It's only a "yes" or "no" I'm looking for...
    9 Feb 2012, 03:06 PM Reply Like
  • The GeoTeam
    , contributor
    Comments (389) | Send Message
     
    Author’s reply » We'd be glad to have civil, non-confrontational exchanges, but we can not and will not keep messages here that are, as Parker2 puts it, outlandish.
    10 Feb 2012, 03:52 PM Reply Like
  • Parker2
    , contributor
    Comments (67) | Send Message
     
    So, if we're looking for "exchanges", how about answering my question?
    10 Feb 2012, 04:01 PM Reply Like
  • Parker2
    , contributor
    Comments (67) | Send Message
     
    So, I assume that since this is the 4th time I asked this question of you, the answer is "no", you have not been onsite at Ping Yi.

     

    Which is incredibly odd. If I wanted to confirm whether or not someone owns a mine, my first place would be the actual mine. If there is no ownership, then it would be a slam-dunk case to simply ask the current mine operators, local officials, employees, etc.

     

    But not in this case - if you actually went to Ping Yi, you would see that LLEN is, in fact, the actual owners of the mine.

     

    But it looks like GeoTeam (even though they say they are "research") is not interested in the *truth* - only interested in how they can distort the stock price to make their profit.
    15 Feb 2012, 12:58 PM Reply Like
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