US Basketball Star Has Near Zero Chance of Overcoming
Home Court Advantage; If He Was Going Up Against an
HK Company in a US Court, He Could Win … and Collect
The NBA legend has filed a lawsuit in China against a Chinese company over name use, as reported here.
He's in for a costly, protracted and ultimately frustrating and disappointing experience. No American--not even Michael Jordan--can beat a Chinese company in a Chinese court. The game is rigged from the get-go.
Too bad for Jordan that he isn't suing a Hong Kong Chinese company in the United States, or in Hong Kong, for that matter. Hong Kong has a separate, internationally respected legal system. Most important, judgments won overseas can be enforced in Hong Kong through well established legal procedures.
On that score, Foreign Confidential™ legal analysts have been following an intriguing case involving a Wall Street financial firm and a Hong Kong-based Chinese coal-blending company. Click here to read about the dispute; here, to read about Hong Kong's legal system in the context of threats to the area's identity; and here, to read about how lawsuits against Chinese companies are contributing to China's increasingly negative image in the United States. Given how celebrity-driven the news business has become, Jordan's case is certain to draw media attention to the topic.
Sports fans and other Americans are going to learn a lot about China's legal system.
EXTRA: NEW WAVE OF CHINESE SECURITIES FRAUD SCANDALS
So much for sports. Investors are about to learn even more about Chinese securities fraud--how many Chinese executives and tycoons have turned China into a Nigeria-like haven for cheating and stealing. Instead of simple scams such as 419, China's savvy, globe-trotting crooks have used listed Chinese companies and the lure of the booming Chinese market to defraud institutional and individual investors around the world. Click here to read about a staggering Chinese coal company scandal. It's just the tip of the iceberg. There will be more Puda Coals--and more lawsuits. Let a thousands lawsuits bloom, foreign investors and their lawyers will say amid mounting losses and mind-boggling tales of looting that will shock even the most cynical Wall Street analysts and observers.
What foreign investors don't appreciate is the role of the Chinese Communist Party in all this criminality. No large company can succeed--or list its shares--with party protection and connections. Behind every fraud there is a corrupt party official or group of officials, lining their pockets, sharing in the ill-gotten gains.
Foreign Confidential™ Predicted this
Incidentally, Foreign Confidential™ (formerly China Confidential) was among the the first media outlets to focus on the looming problem of Chinese fraud. Way back in May 2006 when the New York Times, the Washington Post, the Wall Street Journal and other elite news outfits were fawning over China's rise, Foreign Confidential™ reported the following:
Forget human rights, Internet censorship, and the missile buildup opposite Taiwan for just a moment. The next big story coming out of China is going to be the "F" word--fraud.
It's common knowledge that many Chinese companies keep two sets of books. But many firms seeking to go public overseas--through initial public offerings, reverse mergers and other methods--are suspected of developing a third set of financial records for foreign regulators and investors.
Before going public, one company, according to a story currently making the rounds on Wall Street, stunned its overseas auditing firm by revealing that millions of dollars in cash reserves listed on the company's books were kept in, well, cash-- meaning physical currency. Pressed to document the asset, the company supposedly led a visiting accountant to a safe that contained the cash.
"We're going to see some serious scandals involving Chinese public companies," an American securities lawyer, who insisted on speaking anonymously, told China Confidential. "If American and European companies can succumb to temptation to post phantom profits and revenues, as they have in recent years, imagine what we're going to see coming out of China."
Rumors also abound of shady promoters, brokers, and even lawyers dumping shares in pumped-up "China play" penny stock companies through offshore nominees far from the reach of regulators in the United States, where the stocks trade.