Summons pitfall for Mongolian miner
Things seem to have gone slightly awry at Mongolia Investment Group, a small listed company on the Hong Kong stock exchange. Just over two weeks ago the directors approved a resolution for a share placement amounting to 18.5 per cent of its company's existing issued share capital and expected to raise HK$88.4 million. However, several days later a group of six shareholders, which included two executive directors, issued a summons against the other 10 directors, the company itself, and the placing agent Quam Capital demanded the placing not proceed.
On Monday, the group obtained a further summons placing a temporary restraining order on the placement until the question of the validity of the board's original decision to go ahead with the placement had been settled by the court. Interestingly, the group of those issuing the summons includes Yeo Cheow Tong (pictured) a former Singapore government minister who is still a member of parliament. No doubt he's relishing the challenge of another legal system. Mongolia Investment is in the process of developing mines it acquired last year in the country.
Until August last year, the company rejoiced in the name of Ming Hing Waterworks and was principally involved in various forms of drainage work, slope reinforcement and so on. However, as is so common in Hong Kong, it decided the future for waterworks paled in comparison with the allure of the riches to be found in the current 'big thing', which is commodities and Mongolia.
Coaches stop on the gas
It is nice to see cross-boundary coach operator Trans-Island China Link doing its bit to enhance passenger comfort. The company, which runs coaches between Hong Kong, Shenzhen, Guangzhou and other cities in the Pearl River Delta, has installed bilingual signs in some of its coaches possibly aimed at those who overindulge in baked beans. We can only hope the succinct 'don't fart in car' signs have the desired effect and inculcate a new level of restraint among passengers.
Winds of change
Remaining with the theme of the 'next big thing' we hear from Bruce Yung Pak-keung, managing director of Hong Kong Energy, a firm that operates wind farms on the mainland. Wind farms are all the rage at the moment but he feels the company doesn't get much credit for its commitment. He was reflecting on this over lunch yesterday.
'I often speak at power industry events, and people ask me what my company does. They would say, Hong Kong? What energy? Some people think our abbreviation, HKE, stands for Hong Kong Electric, it's kind of embarrassing.' The upshot of these musings is that the company intends to change its name to China Renewable Energy.
Blowing smoke rings again
There is always something slightly unreal about the Asian Development Bank's pronouncements on the state of Asian economies. It's partly because its such a politically sensitive organisation that you feel its economists are treading on eggshells when they speak. All is looking moderately rosy in the garden of Asia but problems are lurking, the bank says. 'For countries with current account imbalances, and misaligned exchange rates: [like Hong Kong's perhaps?] more flexible exchange rates.' But the bank never calls a spade a spade and says Hong Kong's currency is misaligned or its monetary policy is flawed. One of its suggestions for countries with persistent current account balances is 'internationally co-ordinated temporary measures, such as capital controls'. It took years to thrash out the current currency reserve pool to provide relief for Asian currencies under threat. The first effort collapsed at the first signs of the Asian crisis in 1996, and the refurbished model has yet to be tested. Trying to institute internationally co-ordinated capital controls will be another exercise in herding grasshoppers until too late. It appears the ADB is blowing smoke rings.