RE:RE:RE:RE:re:poster---ISCFA----
lscfa wrote: I own Huaxing too. Its just a guess but there may be different holding company situations that allows GRE to pay the dividend. Check it out.
From what I've been reading, dividends to non-Chinese-owned Chinese companies are on shaky legal ground because they act as a way for Chinese owners to convert their yuans to dollars without going through official currency-control channels, something that might be illegal in China. This article discusses VIEs, something no longer applicable to Greenstar (and probably unnecessary since Greenstar isn't in one of the the protected tech sectors), but its points on dividends may be relevant:
https://www.chinaaccountingblog.com/weblog/beware-of-large-dividends.html
The listed Cayman Islands company then pays a massive dividend to the public company shareholders, of which the VIE owner typically gets the biggest share. Voila! RMB cash in the VIE converted into US$, tax free and without exchange controls. The transactions obviously violate the spirit of China’s exchange controls, and as such they could be shut down should SAFE focus its attention on them.
Another interesting article from the same blog talks about problems that companies like Greenstar are going to have finding auditors very soon:
https://www.chinaaccountingblog.com/weblog/no-more-foreign-auditors.html
The South China Morning Post (SCMP) has two articles today that say that Chinese regulators are cracking down on Hong Kong firms coming into China to do audits. According to the SCMP, the proposal will require firms to use their mainland affiliates to staff engagements. ... The other firms that will be threatened by the proposed rules are the smaller U.S. based firms that developed a robust business auditing reverse mergers listed in the U.S. I think these firms are about the wiped out, and many of their clients may have a tough time finding new auditors. Neither the Big Four mainland affiliates nor other Chinese CPA firms will touch them.