Silvercorp Responds (Again) To Latest Alfred Little Accusations Of Fraud

Tyler Durden's picture

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
tmosley's picture

Question:  If SVM is really a fraud, why are they buying back their stock?  Have any other fraudulent companies engaged in such behavior before?

Tyler Durden's picture

Short answer is yes on several occasions.

slow_roast's picture

Insider buying would make an easy way to later claim naivete about any scandal, but this vehement denial coupled with point-for-point rebuttals takes it to the next degree definitely which I'd have to think lessens the chance that this is a scam.  At some point the SEC "has to" step in and take part in the search for the anonymous short sellers.

notadouche's picture

Since when has the SEC been able to sniff out a scam?

JW n FL's picture

 

 

Keiser Report

http://www.youtube.com/watch?v=OJAjTa_u7Ns

Silver Corp CEO is gonna Die Fighting! whoever is telling the truth? Oops! I mean sending phoney (real{ish}) documents to everyone! LOL!!

Notice all the hot air and NO!! release of information??

I did.

 

slow_roast's picture

Who said anything about the SEC sniffing out a scam?  Someone short-selling, not naked, the stock is leaving a paper trail.  The anonymity of these letters will have a name that likely correlates to the short-seller who is leaving a paper trail along the way. 

notadouche's picture

I suppose no one but why would the SEC give a damned about the identity of the short seller but not the validity of their ascertions?  I would think it more important for the SEC to fact check the information put forth and less concerned about the source.  The identity is only important if they are acting in a fradulent manner.   The sniffing out of a scam is the natural result.  The scammer either being the corporation or the short seller.  

you enjoy myself's picture

its not only insider buying, its the company itself buying back shares. 

Captain Benny's picture

Why not publish the timeline Tyler?  I submitted it twice over the weekend.  Its a great summarization.

http://www.tfmetalsreport.com/comment/53968#comment-53968

SeverinSlade's picture

Tyler,

You have yet to answer any of my questions and continue to give these reports the illusion of credibility.

So I'll ask again.

"

1. So far, Alfredlittle.com and Mr. Anonymous refuse to comment on high grade ore going directly from the mines to the smelter.

2. The silver content has been "verified" by two men standing on the side of the road, picking up dust and pebbles and taking to a lab to be analyzed.  First off, all of the ore bound for the mill should be expected to be of lower silver concentration as it does not include the high grade ore mentioned in the previous question.  Second this analysis cannot be considered credible due to the extremely low sample size.  Had these reports been based on analyzing tons and tons of ore then it'd be somewhat valid.

3. If the company is actively engaging in fraud why have they paid out taxes to the Chinese government that are consistent with their reported revenues and silver production?

4. The Canadian authorities have asked alfredlittle.com and Mr. Anonymous to come forward and participate in the ongoing investigation.  To date, no one has stepped forward.

5. All of these reports have been leaked anonymously and all contact information is being shadowed by a proxy. 

6. If the authors behind these reports are in fact credible why do they continue to lurk in the shadows?"

If SVM is actively engaged in fraudulent activity they successfully managed to dupe just about every credible analyst in the silver mining industry.

Also if Dr. Fein of SVM is running a fraudulent company I feel sorry for him as he is a very stupid individual.  Nothing like throwing away your own personal wealth on shares of your company that are essentially worthless (especially considering that he will soon be out of a job and in jail assuming these allegations are 100 percent true).

SheepDog-One's picture

LMAO at #2, funniest thing Ive ever read!

Pretty much sums up the whole world economy right now, all market activity based upon a 3rd party overhearing something from a phone call, rumor of the contents from an inter office email, etc.

gmrpeabody's picture

I've established my investing strategy by standing along side I-5 and sampling litter gathered of late. Fewer bottles of good spirits coupled with an increase in cheap domestic wines. Not to mention that wrappers from the dollar menu are many times that of the $7 Carl's Junior variety.

Results of this study and analysis are beyond dispute. Place your bets accordingly.

Pegasus Muse's picture

Two interviews worth hearing:  

==========

Silver Stocks - Fraud or Manipulation? Expert panel discussion: Dr. Keith Barron, Dr. Leanne Baker, David Morgan, Chen Lin, and David Bond

In a special broadcast, Jim is joined by famed exploration geologist Dr. Keith Barron, Dr. Leanne Baker, Managing Director of Investor Resources LLC, silver expert David Morgan of the Stone Investment Group, analyst and metals newsletter editor Chen Lin, and silver expert and editor of SilverMiners.com David Bond to discuss recent fraud allegations against several silver companies, particularly Silvercorp Metals.

http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/09/17/02/silver-stocks-fraud-or-manipulation 

====

Silvercorp Responds to Allegations In-Depth Interview with Lorne Waldman of Silvercorp Metals Inc., as well as Robert Archer of Great Panther and Jason Reid of Gold Resource Corp.

http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/09/17/03/lorne-waldman-silvercorp-responds-to-allegations  

FranSix's picture

Wow, hey thanks for point out all the swindlers!11  (kidding)

Tyler Durden's picture

As said, we fully expect more revelations in this ongoing saga. That said, Sino Forest duped all of Wall Street and many of the biggest institutional buyers for years, with the management team having the same up/downside only to end up being a complete scam.

We believe it is up to readers to educate themselves of the facts on either side of the story than to be left like Paulson holding a worthless bag for lack of doing any contrarian diligence.

Either way, we have absolutely no interest in either side of this story and just present the news as they come out.

That said we do find it amusing that so many precious metal fans who bash "paper" commodities all day long in favor of physical are so staunchly supporting precisely a paper representation of bullion.

SeverinSlade's picture

Interesting that Zerohedge remained silent from September 2nd, 2011 to September 18, 2011.  Guess the initial reports weren't newsworthy. 

SeverinSlade's picture

You just said you were only reporting the news and had no vested interest in either side.

So by that basis ZH should have reported the news when it became news back on Sept 2nd...

The news ZH has reported today is still "incomplete", as the allegations are pretty much identical to the ones made last week. 

Tyler Durden's picture

"Alfred Little has come out with its full report on Silvercorp this morning"

SeverinSlade's picture

Okay, okay, point made.

Guess this is the full report until Alfredlittle releases "new information."  lol.

JW n FL's picture

 

 

Keiser Report

http://www.youtube.com/watch?v=OJAjTa_u7Ns

Silver Corp CEO is gonna Die Fighting! whoever is telling the truth? Oops! I mean sending phoney (real{ish}) documents to everyone! LOL!!

Notice all the hot air and NO!! release of information??

I did.

GeneMarchbanks's picture

Now that last paragraph is just plain cruel, and if I may add, pretty funny.

bigdumbnugly's picture

yeah?  you don't think people here that invested in SVM don't know it's a mining company and not some bogus etf like slv?

maybe you don't but it's apples and oranges.

tmosley's picture

The thought in the community is not that paper is "untouchable" or "evil", but rather that it is more vulnerable to manipulation, and in the cases of miners, nationalization.  If China was talking about nationalizing SVM, then the physicalbugs would be saying "I told you so".  The thought that the company itself is fraudulent has not been examined (to my knowledge) by anyone within the community, until very recently.

jekyll island's picture

That's a bridge too far, IMO. Last time I checked, bullion did not have management or counterparty risks.  SVM does not represent bullion, it represents a mining company that happens to produce silver.  I'm kind of embarrassed to have to explain this to you.  Perhaps you were thinking of SLV or GLD as paper proxies to physical metal.  SilverCorp is a legitimate company that is currently being attacked by short sellers, nothing more.  It is not the same as buying GLD and expecting that physical bullion is backstopping your position. 

oddjob's picture

Dr fein can go on buying as SVM is a fully diluted whore with more than 175,000,000 S/O. The recent PP of 10,000,000 shares at 12.70 was the payoff. Hell, any buybacks here are like pissing in the wind.

Ay Caramba's picture

Should we assume by your snarky "typos" comment that you are on the side of AlfredLittle?  If so, please just come out and say so. I've gotten a lot out of ZH in the past, and frankly haven't known that much about many of the events on which you were reporting.  However, I've been following the Silvercorp news for the past few weeks and find the evidence supporting the company far more credible than the accusations provided by the short-sellers.

Your recent postings on Silvercorp appear to be in support of the short-sellers (i.e., posting the latest AlfredLittle posting without comment, and giving the CEO's open letter a negative editorial spin). If so, some justification of your position would be welcome here.  Do you have a knee-jerk reaction against companies who do business in China?  Do you assume that short-sellers like Muddy Waters are always in the right (note that Carson Block has yet to release any justification of his short position).

You're obviously bewildering a lot of your readers here; it would be nice if you'd give us some idea of why you seem to be grinding an ax against Silvercorp. 

Tyler Durden's picture

A: there are no sides here. B: Any bewildered readers are surely thankful for this gift to buy up SVM stock at prices that are cheaper than "fair value" due to the media frenzy surrounding the company. Or is that incorrect?

Fanatic's picture

What about the possibility of existing shareholders with leverage being ruined by forced liquidation due to an artificial decline caused by manipulators, if the company is not a fraud?

GeneMarchbanks's picture

Tough tities, pal. No guarantees in life is there?

Smiddywesson's picture

If someone invested enough in one mining stock to ruin them, they have to admit they made a mistake.  The same goes for excessive leverage, or for holding a losing trade beyone one's stop, if indeed they even had a stop.

There's always an excuse why it's someone else's fault. 

The only person who can ruin you, is you.

DonnieD's picture

If an investor gets ruined by one leveraged position, then they probably deserve it. 

Who knows if this thing is a fraud. I doubt anyone posting here has a clue.

Spitzer's picture

I dumped half my position in Eldorado when Carson Block peeped. It is effecting the whole sector. Maybe its a ploy to keep silver and the miners down.

FranSix's picture

You would have to include the miners in the market, they're not seperate.

notadouche's picture

That is the smartest statement I've heard yet.  I suppose that's why you run the site.  It's amazing how money or the loss thereof makes common sense go right out the window.   If you believe the company back up the truck.  If not get the hell away.  It will resolve itself the way it's supposed to no matter what either side says.  Facts, at some point always surface.  It's an S company either way, Silver or Shit, place your bets.

Not that you needed my affirmation Mr. Durden.

 

bigkahuna's picture

The truck has backed up and the on-loading has commenced.

bigdumbnugly's picture

douche

when you get through wiping off the dingleberries from your chin and gargling after ass kissing tyler maybe you'll think through what you said.

legit companies can be taken down bt large coordinated attacks by shorts.  if they are too small to defend themselves successfully and the supposed "watchdogs" continue to jerk off to porn while it all goes down, then good honest companies and their shareholders can be laid to waste.  facts don't always come to the surface as early as they should and today internet news and rumors of news rule the day.

will it matter that so many respected people in the field (as evidenced by the financialsense interview) who know 50 times more about mining than does anyone here (including tyler and carson block if he's pailing around) believe in SVM and their claims?  and what more can a shareholder go by than official records and the opinion of expertts in the field?

it's easy to say "back up the truck if you believe in the company."  it's no harder than to tell you to walk out in front of that speeding bus because there's a stop sign there to protect you.

shorting at that level whether justly or not can undo normal buying activity, thus causing the shareprice to destabilize.

 

 

 

 

FranSix's picture

Ok, so if a pattern is forming here, then LSG.TO, Lakeshore Gold used to be owned by Hochschild who sold their stake, now they are under fire from analysts about their earnings.

Secondly, Goldcorp. used to own Osisko and sold their stake, much to the surprise and consternation of everybody concerned.  So Osisko is going to run into the same problems, I'd bet.

So any company that runs into shorting problems or production numbers don't match up, and have had participation from the bigger operators are therefore takeover targets.  The Silvercorp CEO aught to issue a poison pill.

notadouche's picture

You must own a ton of shares and getting hammered as I see no need in taking personal shots.  It's not personal Sonny, it's just business.  If SVM has the cash and quality silver and reserves they claim in the end SVM will survive and thrive.  Individuals may be wiped out for betting too heavily and can't handle the short term drop or just flat out panic but if this company's mines and financials are on the up and up, and I for happen to believe they are then they will either weather the storm or get bought by a larger mining company that see's the smarts in adding quality reserves on the cheap.  If the company is well capitalized and has the silver it claims then hang on and watch the mother of all short squeezes.  But why lash out with such ridiculous personal attacks.  Intelligent retorts go much further to legitimizing your point than insults.   

The man said something that was so simple and loaded with common sense and I recognized it.  If he said something I didn't agree with I would've went the other way.  And this person we call Tyler doesn't know who I am, doesn't give a damned who I am or what I think so the idea of anonymously sucking up as if I gain some magical favor is too stupid for words.  

 

tmosley's picture

Would you or anyone else be kind enough to cite some historical precedent? 

tmosley's picture

Less ratings, more precedent citing.  Seriously, I want to know as a student of history.

bigkahuna's picture

Like when? I have not seen a fraudulent company buy it's own shares back while the COO and CEO are buying hand over fist. Fraudsters are usually all sold out by the time fraud comes to the surface. I cannot think of people like bernie ebbers or dick fuld on massive buying rampages just before their dicks hit the dirt. 

 

Can someone give a good template to base any allegations of fraud where the company's treasury along with officers went mad buying the stock? 

tmosley's picture

So the officers are buying stock too?  Is this documented, or are they just claiming publically that they are buying?

jbremner's picture

Chinese Reverse Mergers just another Ponzi scheme?

 

A total of 94 federal securities fraud class action lawsuits were filed in the first half of 2011, a whopping 45 of those (almost half!) are related to Chinese Reverse Mergers and M&A. According to Professor Joseph Grundfest, Director of the Stanford Law School Securities Class Action Clearinghouse, “The new kid on the block is the claim alleging that Chinese-based issuers have made false financial statements. The question remains as to whether or not this litigation will lead to meaningful recovery for plaintiffs. If plaintiffs successfully obtain large judgments in American courts, they may not be able to enforce their judgments against Chinese assets held by Chinese defendants in China.”

 

A number of high-profile Chinese companies have recently fired their auditors, restatedearnings and owned up to lying about assets—admissions that have decimated billions of dollars in market value and harmed the value and reputations of virtually all other Chinese reverse-merger companies. Since April, the Halter USX China Index, an index of US-listed Chinese companies, indicates that stock prices have fallen more than 50 percent.

 

In an attempt to address the series of financial scandals of Chinese companies listed in America, US regulators flew to Beijing in July. The U.S. delegation from the Securities and Exchange Commission (SEC) and The Public Company Accounting Oversight Board (PCAOB) met with Chinese counterparts at the Ministry of Finance and the China Securities Regulatory Commission (CSRC) but failed toagree upon set of cross-border auditing standards. According to an article in Caijing Magazine, a Chinese source close to the negotiations said that the US delegation drafted a list of public companies and brokerage organizations that they wished to investigate, but the Chinese side insisted that this would breach China’s sovereignty and rejected the request.

 

SEC’s microcap fraud task force is gathering information and passing it along to the FBI, but even the FBI is limited in what in can do when the fraud is in another country where defendants are insulated from US judgments by geography and Chinese law. Some say the FBI should be investigating the bankers arranging the deals as 7 USinvestment banks were named in these years’ class action lawsuits, but whether that happens with any real recourse remains to be seen.

 

This epidemic seems to indicate that the moral hazard for investment bankers must be too much to bear. All that is required is a Chinese proxy to act as a company and anaccounting firm to make up numbers--imagine if you could IPO in the biggesteconomy, in the biggest financial markets with the biggest investors in theworld and not have any concern for legal recourse against you, your assets or cash flow! What got my attention was the money the bankers are making, it’s almost unbelievable: currently, bankers are taking up to 10% free equity (amounts unheard of by usual standards) in a Chinese company just for arranging the IPO. The lawyers and accountants also get big chunks of free equity. But wait, why is the pay so rich? Doesn’t it seem too good to be true? Ah yes, the question that everyone thinks Bernie Madoff’s money raisers should have asked, how come everybody is making so much money, isn’t there something wrong?

 

Well that’s the point with US-listed Chinese stocks: there is a Great Wall between the cash flow and assets, and the shell of the company that is public on the US Exchanges. So in effect there are two companies—and the company investors own shares in is the one which has no cash flow or assets attached to it. Just like a Ponzi scheme, with no substance to back up value, a share is really only worth what a subsequent investor will pay. Just don’t be the last guy holding the stock because you don’t own anything tangible, anything with legal recourse, and the only money you’ll get out of it is from the next sucker you sell it to.

  

JBremner

Founder

IVEST 

CPL's picture

Bre-x did.  In fact go look at the directors and go look for similar names that "helped" BreX.

oddjob's picture

Southwestern Gold.

FranSix's picture

Here's the reference.  Remember the story now.  Was quite the market darling prior to revelations.  I think SVM is quite the different story, since you have a mine in production, not an exploration story.

Mines have many ways of stockpiling ore, reporting grades, stockpiling dore bars, and accounting for by product metals.  Could be also that some hedges in place are affecting the bottom line.

http://www.reuters.com/article/2009/06/25/canada-mining-fraud-idUSN2527711920090625

bigkahuna's picture

This story is not precedent. The CEO sold stock prior to the fraud allegations, then he admitted he was a fraud.