More Greedy Hong Kong Tycoons Plead Poverty....

The article in the Standard today called "Buses on the road to ruin", an interview with Kowloon Motor Bus director John Chan [I believe that the controlling shareholders are Winnie Ng with 11 million shares-worth HK$475mm-US$61mm and Sun Hung Kai Properties with 133 million-worth HK$5.7 billion-US$735mm], is just an absolute farce. It is truly disgusting how these people get away with pleading with the public about their manufactured fake problems that they face and in this case put forth very misleading statistics as proof.

John Chan, the managing director of Kowloon Motor Bus, said in an interview with The Standard that about 140 routes, or one-third of the company's 420 routes, have become a money-losing burden and the government should go slow on developing new rail lines.

According to the Company's 2004 annual report, profits after tax in 2004 were HK$731 million vs. HK$597mm in 2003, an increase of HK$134mm or 22.4%.

Although the company made a profit of HK$730 million last year, that was far from satisfactory for a listed company, Chan said.

``Our rate of return is about 5-6 percent,'' he said.

Its a mystery to me where he gets his rate of return number, I cannot find it in the annual report. The company reports on page 69 that the net margin from franchised bus operations actually increased from 9.9% in 2003 to 11.3% last year and net profits of HK$731 over the shareholder funds number of HK$4,251 gives the company a return on equity of 17.1%. Return on equity of 17.1% is a very respectable number and his argument that it is far from satisfactory for a listed company is pure hogwash. Maybe his quote should have said....

"Although the company made a profit of HK$730 million last year, that was far from satisfactory for a listed company since so many other tycoons get away with totally ripping their customers off in certain non-competitive industries here in Hong Kong," Chan said.

``Our rate of return is about 5-6 percent, and some property developers like Richard Li, when involved in non-competitive business, like building that Cyberport project, get to make rediculously high rates of return. We demand that all tycoons be treated equitably by the government and we want some easy payoff projects too!'' he said.

I figure that these liars are just trying to set up the public for an undeserved fare increase so that they can allocate these funds to some mainland venture or some new real-estate project. And the government is probably groveling in front of these greedy liars.

These greedy tycoons should not be tolerated anymore and the Standard here has done a terrible job in pointing out the inconsistencies in John Chan's statements. Shame on you!