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The True Story About Chaoda

The True Story About Chaoda

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Published by hochiping50

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Categories:Business/Law
Published by: hochiping50 on Oct 10, 2011
Copyright:Public Domain

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10/12/2012

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original

 
 
Publisher:
 
Next
 
Media
 
(http://hk.next.nextmedia.com)
 
Article
 
Title:
 
Agricultural
 
Farmer
 
is
 
a
 
Fraud:
 
The
 
True
 
Story
 
about
 
Chaoda
 
(
農作變「老作」超大現真身
)
 
Link
 
in
 
Original
 
Chinese:
 
http://www.kornhill.com.hk/next/magdetails.php?book=4&issue=1107&page=0275130037
 
English
 
Translation
 
It’s
 
not
 
surprising
 
that
 
a
 
company
 
could
 
list
 
successfully
 
on
 
the
 
Hong
 
Kong
 
Stock
 
Exchange
 
after
 
being
 
elaborately
 
and
 
professionally
 
packaged
 
for
 
investors,
 
but
 
it
 
would
 
be
 
surprising
 
if 
 
it
 
managed
 
to
 
survive
 
for
 
more
 
than
 
a
 
decade.
 
Chaoda
 
Modern
 
Agriculture
 
(Holdings)
 
Ltd,
 
has
 
been
 
listed
 
on
 
the
 
market
 
for
 
eleven
 
years.
 
Chaoda
 
has
 
been
 
suspected
 
of 
 
exaggerating
 
the
 
size
 
of 
 
its
 
farmland.
 
Recently,
 
Chaoda
 
issued
 
senior
 
notes.
 
But
 
shortly
 
after
 
the
 
issuance,
 
the
 
company
 
conducted
 
a
 
repurchase,
 
claiming
 
that
 
the
 
sour
 
market
 
was
 
at
 
fault.
 
A
 
number
 
of 
 
analysts
 
also
 
questioned
 
the
 
company’s
 
business
 
operations.
 
With
 
the
 
addition
 
of 
 
a
 
severe
 
decline
 
in
 
vegetable
 
prices,
 
the
 
fund
 
industry
 
has
 
been
 
talking
 
about
 
agricultural
 
stocks
 
as
 
if 
 
they
 
were
 
a
 
pot
 
of 
 
boiling
 
water,
 
and
 
Chaoda
 
seems
 
to
 
be
 
about
 
to
 
blast.
 
For
 
further
 
investigation,
 
our
 
correspondent
 
visited
 
the
 
company’s
 
headquarter
 
in
 
Fujian
 
as
 
well
 
as
 
its
 
production
 
bases
 
in
 
Beijing
 
and
 
Hebei
 
and
 
found
 
that
 
Chaoda
 
has
 
been
 
telling
 
a
 
series
 
of 
 
lies
‐‐
a
 
“corn”
 
turned
 
out
 
to
 
be
 
a
 
“con”.
 
However,
 
thanks
 
to
 
orchestration
 
by
 
the
 
management,
 
auditors,
 
and
 
the
 
Security
 
and
 
Exchange
 
Commission,
 
everything
 
has
 
been
 
covered
 
up
 
for
 
many
 
years.
 
In
 
2000,
 
Chaoda
 
Modern
 
Agriculture
 
(Holdings)
 
Ltd
 
claimed
 
to
 
be
 
the
 
leading
 
vegetable
 
producer
 
in
 
the
 
mainland
 
of 
 
China,
 
with
 
a
 
farmland
 
area
 
of 
 
710,000
 
mu
 
(or
 
473
 
hectares)
 
that
 
was
 
continuing
 
to
 
grow
 
rapidly.
 
It
 
also
 
stated
 
that
 
the
 
company
 
had
 
subsidiaries
 
in
 
13
 
provinces
 
in
 
China,
 
such
 
as
 
Fujian,
 
Beijing
 
and
 
Shaanxi.
 
In
 
addition
 
to
 
vegetables
 
like
 
broccoli,
 
cabbage
 
and
 
corn,
 
the
 
company
 
also
 
runs
 
orchards,
 
tea
 
gardens,
 
and
 
even
 
livestock
 
farms.
 
It
 
adopted
 
one
stop
 
production
 
which
 
included
 
raising/planting,
 
processing,
 
transporting
 
and
 
wholesaling.
 
Chaoda
 
grew
 
rapidly,
 
with
 
revenue,
 
profit
 
and
 
net
 
profit
 
rising
 
more
 
than
 
20%
 
annually.
 
The
 
data
 
seemed
 
incredibly
 
perfect.
 
However,
 
the
 
visit
 
conducted
 
by
 
our
 
correspondent
 
revealed
 
that
 
it
 
was
 
quite
 
another
 
story.
 
Lie
 
One:
 
Overstatement 
 
of 
 
Choada’s
 
Farmland 
 
Holdings
 
Chaoda’s
 
Xiaoyou
 
production
 
base,
 
located
 
in
 
Zhongshan
 
Town
 
of 
 
Putian
 
County
 
in
 
Fujian
 
Province,
 
supposedly
 
contained
 
8,000
 
mu
 
(or
 
533
 
hectares)
 
of 
 
land.
 
However,
 
in
 
2002,
 
media
 
revealed
 
that
 
the
 
size
 
of 
 
the
 
farmland
 
was
 
only
 
1000
 
mu
 
(or
 
67
 
hectares).
 
Our
 
correspondent
 
visited
 
the
 
bases
 
in
 
Beijing
 
 
and
 
Hebei,
 
which
 
Chaoda
 
claimed
 
to
 
have
 
rented
 
in
 
the
 
recent
 
years,
 
only
 
to
 
find
 
that
 
for
 
the
 
last
 
11
 
years,
 
the
 
leopard
 
had
 
not
 
changed
 
its
 
spots
 
at
 
all
 
 –
 
it
 
was
 
still
 
addicted
 
to
 
lying.
 
When
 
our
 
correspondent
 
arrived
 
at
 
the
 
alleged
 
“super
sized”
 
Beijing
 
Pinggu
 
base,
 
to
 
which
 
it
 
took
 
an
 
hour’s
 
drive
 
from
 
the
 
airport,
 
he
 
noticed
 
that
 
the
 
number
 
written
 
on
 
the
 
sign
 
board
 
outside
 
the
 
base
 
was
 
only
 
“3000
 
mu
 
(or
 
200
 
hectares)”,
 
totally
 
inconsistent
 
with
 
Chaoda
 
Annual
 
Reports
 
that
 
claimed
 
5000
 
mu
 
(or
 
333
 
hectares).
 
But
 
the
 
number
 
revealed
 
by
 
the
 
man
 
in
 
charge
 
of 
 
the
 
base
 
was
 
even
 
smaller
‐‐
only
 
1000
 
mu
 
(or
 
67
 
hectares).
 
“This
 
67
hectare
 
base
 
is
 
the
 
biggest
 
one,”
 
the
 
man
 
supplied,
 
“the
 
one
 
in
 
Tianjin
 
is
 
the
 
smallest,
 
only
 
33
 
hectares.”
 
Obviously,
 
Chaoda’s
 
Annual
 
Report,
 
which
 
claimed
 
the
 
base
 
in
 
Beijing
 
covered
 
5000
 
mu
 
(or
 
333
 
hectares)
 
and
 
that
 
in
 
Tianjin
 
21,000
 
mu
 
(or
 
1400
 
hectares),
 
was
 
far
 
from
 
accurate.
 
After
 
four
 
hours’
 
drive,
 
our
 
correspondent
 
arrived
 
at
 
the
 
base
 
in
 
Hebei,
 
which
 
was
 
supposed
 
to
 
have
 
63,500
 
mu
 
(or
 
4,233
 
hectares)
 
of 
 
farmland.
 
Director
 
Li
 
said,
 
“This
 
is
 
the
 
only
 
‘super
sized’
 
base
 
in
 
Hebei,
 
it
 
covers
 
a
 
land
 
of 
 
several
 
thousand
 
mu
 
(several
 
hundred
 
hectares).
 
(Why
 
doesn’t
 
it
 
match
 
the
 
record
 
on
 
Chaoda’s
 
Annual
 
Report?)
 
I
 
don’t
 
know.
 
It
 
doesn’t
 
matter
 
how
 
big
 
it
 
is
 
as
 
long
 
as
 
we
 
have
 
an
 
ample
 
supply
 
of 
 
broccoli
 
to
 
meet
 
demand.
 
Moreover,
 
the
 
price
 
hasn’t
 
been
 
set
 
yet.”
 
What
 
our
 
correspondent
 
found
 
on
 
the
 
site
 
was
 
a
 
vast
 
wasteland,
 
with
 
trash
 
everywhere.
 
Mr.
 
Zhan,
 
who
 
worked
 
in
 
the
 
office
 
in
 
the
 
Hebei
 
Zhangbei
 
base,
 
confessed
 
that
 
the
 
base
 
only
 
operated
 
from
 
May
 
to
 
the
 
end
 
of 
 
July.
 
“It’s
 
too
 
cold
 
here.
 
Except
 
for
 
these
 
three
 
months,
 
we
 
do
 
not
 
do
 
any
 
farming.
 
In
 
this
 
season,
 
we’ll
 
plant
 
broccoli
 
and
 
we
 
will
 
harvest
 
it
 
in
 
late
 
July.”
 
Wearing
 
an
 
eiderdown,
 
Director
 
Li
 
was
 
walking
 
back
 
to
 
the
 
large
 
factory,
 
with
 
his
 
hands
 
in
 
his
 
pocket
 
to
 
keep
 
himself 
 
warm.
 
“It
 
was
 
built
 
in
 
2004.”
 
He
 
said,
 
“But
 
because
 
of 
 
the
 
cold
 
and
 
dry
 
weather,
 
we
 
have
 
to
 
pay
 
the
 
unused
 
land
 
tax.
 
It
 
costs
 
a
 
lot.
 
Every
 
year
 
we
 
are
 
losing
 
money.”
 
Even
 
in
 
a
 
place
 
like
 
Putian
 
in
 
Fujian,
 
where
 
it
 
is
 
hotter
 
and
 
more
 
humid,
 
the
 
only
 
vegetable
 
grown
 
in
 
the
 
vast
 
area
 
of 
 
farmland
 
there
 
was
 
Chinese
 
onion,
 
a
 
plant
 
that
 
has
 
strong
 
adaptability
 
to
 
climate
 
but
 
is
 
sold
 
at
 
a
 
very
 
low
 
price
‐‐
1
 
RMB
 
($0.15)
 
for
 
a
 
half 
 
kilo
 
(1.1
 
pounds).
 
After
 
all,
 
the
 
onions
 
were
 
grown
 
to
 
keep
 
up
 
appearances.
 
Chaoda
 
has
 
been
 
listed
 
on
 
the
 
stock
 
exchange
 
for
 
eleven
 
years
 
and
 
raised
 
total
 
capital
 
of 
 
10,500,000
 
RMB
 
(1,567,000
 
USD).
 
And
 
it
 
announced
 
it
 
would
 
buy
 
more
 
land.
 
However,
 
our
 
correspondent
 
found
 
that
 
the
 
production
 
area
 
was
 
much
 
smaller
 
than
 
claimed
 
and
 
that
 
much
 
of 
 
the
 
farmland
 
remains
 
unused.
 
In
 
Macquarie
 
analyst
 
Jake
 
Lynch’s
 
current
 
report,
 
he
 
pointed
 
out
 
only
 
24%
 
of 
 
the
 
land
 
was
 
used
 
for
 
produce
 
cultivation,
 
and
 
Chaoda
 
never
 
explained
 
the
 
purpose
 
of 
 
the
 
rest
 
of 
 
the
 
land.
 
He
 
also
 
indicated
 
the
 
company’s
 
future
 
expenses
 
would
 
be
 
too
 
high,
 
asking
 
“Where
 
is
 
the
 
extra
 
money
 
going
 
to?”
 
Lie
 
Two:
 
Factory 
 
with
 
Outdated 
 
Facilities
 
In
 
addition
 
to
 
buying
 
land
 
and
 
barns,
 
Chaoda
 
also
 
claimed
 
to
 
be
 
investing
 
more
 
money
 
in
 
upgrading
 
machines
 
and
 
facilities.
 
In
 
the
 
Xianyou
 
base
 
where
 
our
 
correspondent
 
visited,
 
broccoli
 
was
 
the
 
most
 
 
widely
 
grown
 
crop,
 
probably
 
because
 
it
 
could
 
be
 
sold
 
at
 
a
 
good
 
price
 
and
 
exported
 
to
 
Japan.
 
However,
 
there
 
were
 
 just
 
a
 
few
 
facilities
 
at
 
the
 
site
 
and
 
the
 
processing
 
of 
 
the
 
crops
 
was
 
quite
 
simple.
 
After
 
broccoli’s
 
leaves
 
were
 
removed
 
at
 
room
 
temperature,
 
the
 
broccoli
 
would
 
be
 
put
 
into
 
a
 
foam
 
box
 
and
 
then
 
placed
 
in
 
the
 
freezer.
 
The
 
tools
 
there,
 
such
 
as
 
scythes,
 
were
 
too
 
old
 
to
 
be
 
useful.
 
One
 
of 
 
the
 
farmers
 
even
 
had
 
to
 
go
 
to
 
the
 
office
 
to
 
get
 
another
 
scythe,
 
without
 
which
 
he
 
couldn’t
 
have
 
continued
 
his
 
work,
 
because
 
the
 
handle
 
of 
 
the
 
old
 
scythe
 
was
 
so
 
loose
 
that
 
it
 
broke.
 
The
 
machines
 
used
 
on
 
the
 
farm
 
were
 
cheap
 
and
 
by
 
no
 
means
 
satisfactory.
 
When
 
asked
 
whether
 
there
 
was
 
any
 
valuable
 
machinery
 
at
 
the
 
facility,
 
the
 
farmer
 
brought
 
our
 
correspondent
 
to
 
see
 
the
 
farm’s
 
tractors.
 
In
 
2003,
 
the
 
company
 
made
 
a
 
claim
 
that
 
it
 
would
 
spend
 
100
 
million
 
RMB
 
(15
 
million
 
USD)
 
on
 
the
 
construction
 
of 
 
irrigation
 
systems
 
and
 
infrastructure
 
at
 
the
 
production
 
sites
 
in
 
Nanjing
 
and
 
Beijing.
 
But
 
according
 
to
 
Mr.
 
Chen’s
 
introduction
 
of 
 
the
 
advanced
 
facilities,
 
there
 
were
 
only
 
two
 
tractors,
 
three
 
corn
 
processing
 
machines,
 
one
 
large
 
packing
 
machine
 
and
 
five
 
freezers
 
on
 
his
 
list.
 
There
 
were
 
no
 
more
 
than
 
a
 
few
 
automatic
 
sprinklers;
 
humans
 
had
 
to
 
perform
 
the
 
rest
 
of 
 
the
 
irrigation
 
by
 
hand.
 
Lie
 
Three:
 
Organic
 
“Downgraded” 
 
to
 
unpolluted 
 
In
 
2003,
 
Chaoda
 
identified
 
itself 
 
in
 
its
 
Annual
 
Report
 
as
 
“a
 
company
 
that
 
mainly
 
produces
 
organic
 
and
 
green
 
vegetables
 
and
 
fruits”,
 
making
 
the
 
production
 
of 
 
organic
 
crops
 
as
 
the
 
company’s
 
signature.
 
However,
 
in
 
recent
 
years,
 
the
 
word
 
“organic”
 
disappeared
 
from
 
the
 
company’s
 
annual
 
reports,
 
and
 
the
 
company
 
has
 
given
 
no
 
explanation
 
for
 
the
 
omission.
 
Our
 
correspondent
 
visited
 
the
 
company’s
 
headquarter
 
located
 
in
 
Tong
 
Pan
 
Road
 
in
 
Fuzhou.
 
“Chaoda
 
is
 
truly
 
great!”
 
the
 
manager
 
of 
 
the
 
vegetable
 
department
 
said,
 
“Chaoda
 
is
 
the
 
greatest
 
and
 
grandest
 
company
 
in
 
the
 
agriculture
 
industry.
 
But
 
let
 
me
 
be
 
clear,
 
the
 
vegetables
 
we
 
produce
 
are
 
unpolluted,
 
not
 
organic.”
 
Unpolluted
 
means
 
that
 
a
 
product
 
carries
 
little
 
pesticide
 
and
 
fertilizer.
 
Unpolluted
 
is
 
a
 
lower
 
standard
 
than
 
organic.
 
As
 
long
 
as
 
the
 
amount
 
of 
 
chemical
 
residue
 
on
 
vegetables
 
is
 
tested
 
to
 
be
 
within
 
the
 
limits
 
prescribed
 
by
 
the
 
country,
 
it
 
can
 
be
 
identified
 
as
 
unpolluted.
 
At
 
Chaoda’s
 
farm,
 
packs
 
of 
 
pesticide
 
could
 
be
 
seen
 
everywhere,
 
which
 
made
 
a
 
mockery
 
of 
 
its
 
claim
 
of 
 
being
 
healthy.
 
Compared
 
with
 
organic
 
vegetables,
 
unpolluted
 
ones
 
are
 
much
 
cheaper,
 
sold
 
at
 
almost
 
the
 
same
 
low
 
price
 
as
 
that
 
of 
 
the
 
common
 
vegetables.
 
Lie
 
Four:
 
Exclusive
 
Shops
 
Have
 
Vanished 
 
In
 
Fujian,
 
Beijing
 
and
 
Hebei
 
province,
 
Chaoda’s
 
vegetables
 
couldn’t
 
be
 
found
 
in
 
either
 
supermarkets
 
or
 
wholesale
 
markets.
 
Huang
 
Yong,
 
the
 
manager
 
of 
 
Chaoda’s
 
company
 
headquarter,
 
explained
 
that
 
it
 
was
 
because
 
the
 
company
 
had
 
been
 
focused
 
on
 
the
 
export
 
business
 
with
 
Japan,
 
Korea,
 
and
 
the
 
European
 
Union
 
that
 
year.
 
“We
 
have
 
processing
 
factories
 
in
 
which
 
we
 
are
 
able
 
to
 
produce
 
vegetables
 
that
 
meet
 
the
 
import
 
commodity
 
criterion.
 
If 
 
you
 
want
 
to
 
buy
 
our
 
vegetables,
 
you
 
can
 
go
 
to
 
Yonghui
 
Supermarket.
 
Our
 
products
 
are
 
sold
 
there.”
 
But
 
strangely
 
enough,
 
our
 
correspondent
 
still
 
couldn’t
 
find
 
Chaoda’s
 
vegetables
 
sold
 
in
 
any
 
of 
 
the
 
Yonghui
 
Supermarkets
 
in
 
Fujian.
 
Only
 
a
 
single
 
location
 
out
 
of 
 
all
 
of 
 
them
 
sold
 
cucumbers
 
from
 
Chaoda.
 
“Our
 
vegetables
 
are
 
not
 
packaged.”
 
Huang
 
explained
 
again,
 
“They
 
are
 
 just
 
put
 
in
 
a
 
foam
 
box
 
and
 
hard
 
to
 
distinguish.”
 

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