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What Is Blue Chips Stocks?

Why were the S-chips (China stocks) in Singapore stock market so prone to frauds?

  • The incidence of frauds on this category of stocks (China stocks) in the Singapore stock market is a statistical outlier. Why were the S-chips (China stocks) in Singapore stock market so prone to frauds? The second question is how could the stock exchange allow so many of them to be listed in the first place? What mistakes were made (mainly by previous management)? http://en.wikipedia.org/wiki/S-Chips_Scandals

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    I suspect it comes from the fact that Singapore is run by technocrats, who generally trusts what they see on black-and-white, without suspecting that the world out there is more seedy than the black-and-white Singapore. Those of us who have lived and worked in third world countries is aware and able to ask the correct questions (or even developed the sixth sense) to ferret out these suspicious companies.

Michael Chan at Quora Visit the source

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The basic premise in the valuation of a company is based on the *HONEST* provision of accounting data to the valuers.  If the accounting data is fraudulent to begin with, coupled with the lack of severe penalties for providing such data and the gullibility of the Singaporean technocrats in accepting such data because they fail to observe that prosecuting such people across national boundaries (especially in China) is next to impossible, small wonder that such frauds can be perpetuated with such impunity.

Anonymous

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