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  "docSlug": "be158128498b",
  "documentTitle": "Focus Media Holding Ltd. (FMCN)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2012-01-06 00:00:00",
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  "notes": "The slide uses a narrative structure to raise red flags about a potential shell company transaction.",
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      "kind": "callout",
      "text": "The key open issues from this series of transactions are: Why did a tiny ginseng plantation company merit FMCN's attention?",
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      "text": "Why did a tiny ginseng plantation company merit FMCN’s attention? How much did Wang and Chen pay for Shengtai? How much did FMCN book for the acquisition of Shengtai, and how does that compare to the price Wang and Chen paid? How much cash actually changed hands, and did Wang and Chen keep it or was it redirected elsewhere?",
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      "kind": "paragraph",
      "text": "On May 21, 2008, two individuals purchased the entirety of Shengtai Ginseng from Mr. Liu and Ms. Xue. Although FMCN was not one of the new shareholders, the purchasers renamed the company Hunchun Focus Media Advertising Co. Ltd. They also changed the scope of business from “ginseng plantation” to “building LCD television advertising production, distribution and outdoor advertising production and distribution.” The new shareholders were Mr. Wang Feng and Mr. Chen Yu, with each owning 50%. As part of the local registration procedures, Mr. Wang (who became Shengtai’s Legal Representative), had to submit his resume to SAIC. According to the resume, Mr. Wang was an employee of Focus Media at the time he purchased half of Shengtai Ginseng’s shares.",
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      "text": "We do not know what transpired over five months after Messrs. Wang and Chen acquired Shengtai, but on October 21, 2008 Mr. Wang and Mr. Chen transferred ownership of Shengtai to FMCN. There is no indication in the SAIC files as to what the consideration for either transfer was. The key open issues from this series of transactions are:",
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      "text": "9 The acquiring entities were Shanghai Focus Media Advertising Co. Ltd., and Shanghai Focus Media Advertising Agency Co. Ltd.",
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