Hall of Shame

Consumer Discretionary

Bosideng Intl Hlds ( 3998 HK)

Year: 2019

Bosideng International Holdings Limited, a Chinese company develops down apparel products in the Peoples Republic of China. The Company's products include down jackets, vests, and pants which it offers through retail outlets located in multiple cities.   It listed on the Hong Kong Exchange in October 2007 and raised HK$6.93B during is IPO.   In two later share offerings HK$977.16M was raised; ( Dec.2010 - HK$717.97M, Jan.2013 - HK$259.19M).

Aug 6, 2012  On Seeking Alpha, Jack Kreuz, a blogger published a post on Bodiseng. "Bosideng  A Subsidiary Of The Gao Conglomerate"  In the post, he said that he believed the Gao family were running a low-profile embezzlement operation against the investors of Bosideng.  Although it might have been in the process of becoming one, it was not your typical Chinese capital-expenditures fraud.  He thought it was a bit more elaborate. Mainly, it consisted on two different strategies:
      1) Selling economic participations of their family businesses to Bosideng (Cayman) at a significant overprice.
      2) Using the cash of Bosideng (Cayman) to finance the expansion of the family conglomerate.

June 24, 2019 - Bonitas Research alleged in a report, "Short Bosideng". that Bosideng had :-
     1. included RMB 807 million of fabricated profits in its reported financial statements to generate investor interest.
     2. artificially overpaid RMB 2 billion for multiple acquisitions from undisclosed insiders.
     3. Disposed RMB 56 million of real assets at bargain prices to Chairman Gao.  
     4. Significant historical dividends paid to Bosideng insiders who own 65%+ of Bosideng’s shares outstanding

June 24, 2019 - Bosideng issued an announcement that said the Company denies all of the allegations against the Company in the Report. The Report comprises statements which are misleading, biased, selective, inaccurate and incomplete as well as groundless allegations and irresponsible speculations.  It responded to each of the allegations

June 26 Bonitas issued a rebuttal report on Bosideng's clarifications including three more allegations:  The three offences of the latest allegations are:
    1. Bosideng lied about buying Bao Bao from an independent third party.
    2. Bosideng lied that Mr. Zhou founded Jesse in 1998.
    3. Bosideng lied about Jesse's income contribution after the acquisition.

June 26, 2019 - Bosideng issued another announcement again saying the Company denies all of the allegations against the Company in the report and responded to the allegations on both of Bonitas reports. 

Seeking Alpha: Bosideng - A Subsidiary Of The Gao Conglomerate - Jack Kreuz Aug 6, 2012

Bonitas:  Short Bosideng  - June 24, 2019
Bosideng: Announcement & Clarifications   - June 24, 2019
sjfzxm.com: Bonitas - Second Rounds Of Sniping Short Selling Reports   - June 26, 2019
Bosideng: Announcement & Clarifications   - June 26, 2019

Bosideng: Annual Report 2019
Bosideng: Annual Report 2018