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  "documentTitle": "Focus Media Holding Ltd. (FMCN)",
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  "authorName": "Carson C. Block",
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  "notes": "This is a research note page focusing on corporate governance failures and insider trading allegations.",
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      "text": "FMCN is run primarily for the benefit of insiders.",
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      "text": "Allyes Information Technology Company Limited was impaired a second time (after being impaired from $296.9 million to $78.5 million)37 to $32.3 million38 in order to allow insiders to purchase 38% of it at a bargain price (see infra All(Directors Say)Yes to Enriching Insiders). The purchasing insiders flipped the stake seven months later at an implied valuation of $200 million,39 which is an annualized IRR of 2,127.2%.",
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      "text": "The most egregious example of insiders' self-dealing at the expense of shareholders is their use of FMCN to trade in and out of Allyes. We",
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      "text": "Generally we enter into a three-year standard employment contract with our officers and managers and a one-year standard employment contract with other employees. According to these contracts, all of our employees are prohibited from engaging in any activities that compete with our business during the period of their employment with us. Furthermore, the employment contracts with officers or managers include a covenant that prohibits officers or managers from engaging in any activities that compete with our business for two years after the period of their employment with us.36",
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      "text": "Dotad did not fare so well. FMCN impaired the entire purchase price of $26.8 million. We do not understand the games that FMCN, Mr. Xu, and the Yitong sellers were playing – suffice to say that there is likely substantially more than meets the eye.",
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      "text": "employee34 was one of two transferors of ownership of BFTL to Mr. Xu. Further, FMCN transferred one of its subsidiaries, Yitong, to BFTL. BFTL (with Mr. Xu still running it) went on to raise $100 million from Telstra and Softbank in 2010,35 and appears to be thriving. Apparently, the non-compete agreement that FMCN touts in all of its 20-F filings does not apply to Mr. Xu:",
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      "text": "Generally we enter into a three-year standard employment contract with our officers and managers and a one-year standard employment contract with other employees. According to these contracts, all of our employees are prohibited from engaging in any activities that compete with our business during the period of their employment with us. Furthermore, the employment contracts with officers or managers include a covenant that prohibits officers or managers from engaging in any activities that compete with our business for two years after the period of their employment with us. — 2007 20-F, pp. 87-88",
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