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Focus Media Holding LTD (ADR) |
Jason Jiang has personally acquired several vertical online media
companies recently, including GouFang, 18.com.cn, Tiantian Fund,
Pcpop, 39.net, 116.com.cn, Autohome and more than ten ad. agency
companies.
I observed that GouFang and 18.com.cn and Tiantian Fund have poured
millions of money into Focus Media to do advertising. Jason used these
related companies to bolster FMCN's profits for years. After share
increases due to profit rise, Jason sold out his personal holdings in
FMCN and cashed out tens of millions of US dollars to do further
acquisitions in China. This is his ideal funding chain and has been
executed for years without disclosure.
Currently one short investor sued FMCN for related party transaction,
and I believe it is just a beginning. I believe related party
transacton accounts for more than 8% of FMCN's total revenue from 06
to 07. I also hope SEC will send out the legal letter and require FMCN
to change accountant from Deloitte to PWC to re-audit all its books
from pre-IPO up todate. I think some VCs including IDG which had
invested into FMCN have also involved into FMCN's 'financial cooking
tactics'.