Everyday Economic Journal reporter Yang Kezhan, intern reporter Shi Lei, Zhong Shu
The Everyday Economic Journal once conducted a series of reports titled "China Concept Stock 'Killer' Lurking in Chengdu, Mysterious Operator Hard to Find," investigating the enigmatic fund EOS that was suspected of shorting Silvercorp Metals. However, questions such as who operates EOS internally, why there were so many "shell" offices left in Chengdu, and who exactly is the "killer" Jon Carnes have remained unknown until now. It wasn't until a person close to EOS spoke to the reporter that more astonishing facts were exposed.
One Horizon Actually a Charitable Fund?
Recently, the Everyday Economic Journal contacted a person close to EOS. He revealed that One Horizon Foundation is the largest shareholder of EOS Holdings LLC, and One Horizon controls 100% of the shares of EOS Asia under EOS Holdings LLC. The real registered address of One Horizon is in the United States and the Bahamas. He disclosed that Jon Carnes is the trustee of One Horizon, and he set up One Horizon as a charitable fund for tax avoidance purposes.
Public records show that EOS Holdings LLC managers include Jon R Carnes, Walter C Carnes, Gregory P Leffel, Mary K Leffel, Julie K Foreman, William N Kenney IV. Notably, Gregory P Leffel is the chairman of One Horizon Foundation. One Horizon Foundation participated in donations to the public charity Seedleaf in 2010.
Further investigation by the reporter revealed that EOS Asia Investment Ltd., is the Hong Kong entity operated by Jon Carnes on the mainland. According to the annual return form No. 1033469 obtained from the Hong Kong Companies Registry, EOS Asia Investment Ltd. is a private company with share capital. The registered capital of the company is HK$10,000, with 10,000 shares all held by One Horizon Foundation. The registered address is Room 3A, 20/F, Far East Development Building, 121 Des Voeux Road Central, Hong Kong.
EOS Asia Only Has Three Directors
It is worth noting that EOS Asia has only three directors. The first director is Walter Cecil Carnes (Jon Carnes' father, residing at 2560 Highvale Drive, Las Vegas, passport number 0388373XX); the second director is the major shareholder One Horizon Foundation; the third director is Liu Li (residing at Room 905, Building 3, No. 181 Changshou Road, Putuo District, Shanghai, passport number G303920XX). In addition, Jon Carnes serves as the general manager of EOS Asia. The reporter noticed that the address of One Horizon Foundation left on the EOS Asia registration form is Guangdong Road, Huangpu District, Shanghai.
This 2010 annual return was signed and filed by Jon Carnes on behalf of One Horizon Foundation as a director on March 24, 2011. According to the aforementioned source, on October 11, 2010, EOS Asia Investment Ltd. and Chengdu Servcorp Grandview Business Services Co., Ltd. signed a virtual office lease contract, renting an office space at Unit 18, Shangri-La Centre, 9 Binjiang East Road, Chengdu. However, EOS Asia Investment Ltd. did not register with the industrial and commercial authorities in Chengdu. Its actual office address was Room 1817, West Building, No. 19 Renmin South Road Section 4, Chengdu. Unfortunately, this actual office address is now empty.
In fact, many former employees of EOS Asia have already left. Christian Arnell, mentioned in the article "China Concept Stock 'Killer' Lurking in Chengdu, Mysterious Operator Hard to Find," recently clarified to the Everyday Economic Journal reporter that his main work at the time was responsible for PE investment and administrative management. He left EOS Asia in 2010 and was unaware of its involvement in shorting China concept stocks.
Is Jon Carnes Playing a "Left Hand, Right Hand" Game?
What is the connection between EOS and Alfred Little, who has continuously shorted 15 China concept stocks? The above-mentioned source told the reporter, "Jon Carnes is the short seller Alfred Little who made huge profits by shorting 15 China concept stocks. His business model is to manage funds through proprietary and others' funds. Jon Carnes and Kun Huang first issued reports under the name of IFRA, then provided them to Alfred Little." In other words, this complex shorting chain is just a game of "left hand, right hand" played by Jon Carnes.
"The reason EOS set up so many offices in Chengdu should be due to secrecy considerations," the person further pointed out, "they even had their mobile phone cards bought by travel agencies to avoid revealing their whereabouts."
In fact, the relationship between EOS executives and the company is also very complicated. Former vice president of EOS, Huang Bijiang, once clarified, "I have had no relation with EOS since 2010. A lot of information online is from years ago." However, the reporter found on the official website of Huayu Digital Company where Huang Bijiang works that last October 12th, Jon Carens had just inspected the Huayu Digital Industrial Base located at the foot of Qingcheng Mountain in Chengdu and took commemorative photos with General Manager Huang Bijiang and other senior company officials. When the reporter tried to enter the Huayu Digital official website yesterday, it was found that the website system was under upgrade and the webpage could not be opened.
After extensive investigations by reporters from the Everyday Economic Journal, they still failed to contact relevant personnel from EOS to comment on the above statements.
Background
In September 2011, the China concept stock company Silvercorp Metals, listed on the Toronto Stock Exchange and the New York Stock Exchange, encountered a series of short attacks in the United States and plummeted by 19% on September 14th. Its short seller was Alfred Little, who had continuously questioned 15 China concept stock companies. Afterwards, Silvercorp Metals discovered that the main plotter behind the short attack was EOS Holdings LLC. Following this lead, reporters from the Everyday Economic Journal conducted a series of investigations. In the previous report, the reporter found that EOS Asia had posted a job advertisement. After visiting the actual workplace address of Chengdu Shengji Investment Management Company listed in the job advertisement, the reporter did not find any more valuable information.
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