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Tuesday, February 21, 2012

China investor defends L&L vs Skippack firm's attack

ALSO: US busts another GeoInvesting target. NYTimes story here.

UPDATED: Mark Jensen, portfolio manager at New York-based T-Squared Partners LLC, the largest institutional holder of L&L Energy, sent me a note this morning objecting to Skippack-based GeoInvesting's critique of China coal investor L&L Energy, which I wrote about here.

GeoInvesting questions L&L's claim to control a coal mine complex in southern China, citing local Chinese mine and property documents and recorded interviews with men it identifies as the mine's actual owners.

Jensen says his firm has visited the mine more than a dozen times, checked legitimate sale documents, and obtained "a legal opinion from the largest law firm in China," among other proofs of L&L's purchase of the site.

He also questions GeoInvesting's report. For one thing, Jensen says, GeoInvesting's China documents appear to be notarized on a Sunday. Jensen says the Yunnan province notary office GeoInvesting cited doesn't open Sunday. To Jensen, this raises the question of whether GeoInvesting's documents are "forged;" he calls GeoInvesting day-traders who look to "manipulate stocks", and whose targets sometimes fail to fall.

I asked GeoInvesting's Dan David about the notary dates; he vouches for his documents. He says the mine remains listed for sale by its actual owners.

LATEST: GeoInvesting used to do promotional work for L&L and was also paid to promote other stocks it later turned against. David says the firm's conversion from paid investor relations, to shorting, was based on the evidence.
Posted by Joseph N. DiStefano @ 10:16 AM  Permalink | 6 comments
Comments   
  • 0 like this / 0 don't   •   Posted 12:45 PM, 02/21/2012
    Joe, you write that Dan said "L&L should make public any ownership or purchase agreements". Please note that these are already publicly available through SEC.gov and have been for a long time.

    Also worth noting, a notary does not verify the information in the letter - similar to the US a notary just verifies signature.
    — Max Logan
  • 0 like this / 0 don't   •   Posted 1:25 PM, 02/21/2012
    Max, I paged through the 10-Qs and saw references to the mine acquisition, a discussion of the sale terms (including references to payments that had not yet been made), and updates on the mine's status (closed and not working), but I did not see the purchase agreements appended. If you can show me where they are posted we can link them for readers. Joe D.
    — Joe D
  • 0 like this / 0 don't   •   Posted 2:39 PM, 02/21/2012
    Sure. It's in 10Q for period ended 1/31/10. Here is the link to the actual purchase agreement of the mine in question:

    http://sec.gov/Archives/edgar/data/1137083/000116854210000019/ex991acquisitionagreementpin.htm
    — Max Logan
  • 0 like this / 0 don't   •   Posted 2:56 PM, 02/21/2012
    "The actual purchase agreement" you mean an English translation, right? Has the sale closed? The agreement's conditions include increased investment and production, but the 10-Q filings report the mine has been mostly shut since the deal was signed.
    — Joe D
  • 0 like this / 0 don't   •   Posted 4:38 PM, 02/21/2012
    Also Joe, regarding this statement:

    "He says the mine remains listed for sale by its actual owners"

    You should ask Geo why the government issued permit for Ping Yi mine does *not* match the permit number listed on the website that Geo claims is LLEN's mine for sale.

    Two different govt. issued permit numbers.

    Geo's reply to this? It's a typo. No... there is a typoe in this sentence. The permit numbers are *significantly* different from one another.

    More examples of Geo's manipulative work.
    — Max Logan
  • 0 like this / 0 don't   •   Posted 4:33 PM, 02/21/2012
    Yes, the English translation since SEC.gov is for US investors.

    The sale closed with that agreement. LLEN first operated, then shortly thereafter purchased. That agreement is the purchase agreement.

    The mine was shut due to governtment intervention (a series of accidents at mines unrelated to LLEN, but geographically local). The conditions have been modified as a result.
    — Max Logan


6 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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