Might Sino Agro Food Inc (OTC:SIAF) Be Just Another Money Pit
Sino Agro Food Inc (OTC:SIAF) is allegedly a very successful agricultural company that develops, produces and distributes organic food and agrarian products. The only problem is finding out if it is indeed as successful as its reports filed with the SEC claim, because it is located in the People’s Republic of China.
Since being located in China and therefore cannot be audited the information that is contained in their annual report filed just 3 days ago on April 15 might not be the real deal. The thing is that the Chinese government doesn’t allow audits of its companies in order to prevent leaks of state secrets.
The latest report filed with the SEC states that the total current assets of SIAF are $134 million, but those are just numbers that can’t be verified. In this international situation any investor that wants to put his money with SIAF would have to take their word for it. Here are some of the numbers of prime interest that were in their last annual report.
cash: $8.4 million
current liabilities $22 million
revenue: $138 million
This looks like a good investment choice, however, the risk remains as this information comes from the company side and is not accountable for as there is no authority to regulate the report. One would have to guess if it is true, but there is something that rings the bell of raising concern. It may sound like something little, but it can be defining at a point in the future in which we will know for certain how big the company is…if that time comes that is.
We are speaking about their website. For starters their English website is really poor on information about almost everything. There is just the general overview of the company in the About Us section and an extensive Investor Relations section. When you try to click on Subsidiaries you can see that the section is under construction. Same is the deal when you try to look at the Joint Ventures category.
Furthermore all the pictures on the website are obviously generic. Being the hound dogs that we are we decided to also check the Chinese version of the website. It’s not like we know Mandarin but it had really little information there too. The way we understood what we were looking at was by looking at the subcategory that is after the domain name which are usually written in English for ease of programming.
The most disturbing thing that we saw was while looking at the news category. The last posted news about the company were from December 29,2009. Another thing that caught our attention was that in the about section the image is again clearly a generic one which portrays 4 caucasians cheering in an office like background. Even if you leave the race factor aside, SIAF‘s logo put on the white office wall behind them is so obviously manipulated that you can see the pixels in it.
All this combined with the fact that their financial data can’t be confirmed may lead some people to think that this is a scam. I can’t think of any company with $138 million in revenue that has to manipulate office pictures in order to put their logo in it, let alone have a website which offers no actual or current information.
With all that being said we can say that this is probably one of the riskiest investment choices out there because there is no solid evidence on anything about this company and many people might get burned by the lack of relevant information.