Everyday Economic Journal reporters Yang Kezhan, Shi Lei and Zhong Shu - Everyday Economic Journal once published a series of reports titled "The Killer of Chinese Concept Stocks Lurks in Chengdu, the Mysterious Trader is Hard to Find", investigating EOS (依奥斯), the mysterious fund suspected of shorting Chinese concept stock Silvercorp. However, we have always been unaware of who operates EOS internally, why there are so many "shell" offices in Chengdu, and who exactly is the "killer" Jon Carnes. It wasn't until someone close to EOS spoke to the reporter that more shocking facts were revealed.
Is One Horizon Actually a Charity Fund?
Recently, a person close to EOS contacted the Everyday Economic Journal reporter. He revealed that the One Horizon Foundation (一地平线基金) is the largest shareholder of the EOS fund, and the One Horizon Foundation also controls 100% of the shares of EOS Asia under the EOS fund. The actual 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 it up as a charity fund for tax avoidance purposes.
Public records show that the management personnel of EOS HOLDINGS LLC 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 the One Horizon Foundation. In 2010, the One Horizon Foundation participated in donations to the public welfare charity organization Seedleaf.
Further investigation by the reporter found that EOS Asia Investment Ltd., is the Hong Kong entity operated by Jon Carnes on the mainland. According to the anniversary declaration form No. 1033469 obtained from the Hong Kong Companies Registry, EOS Asia Investment Company is a private company with share capital. The company's registered capital is HKD 10,000, with a total of 10,000 shares, all held by the 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
Notably, EOS Asia has three directors. Among them, 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, the 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). Additionally, Jon Carnes serves as the General Manager of EOS Asia. The reporter noticed that the address left on the registration form of EOS Asia is Guangdong Road, Huangpu District, Shanghai.
This 2010 anniversary declaration form was signed and declared by Jon Carnes on behalf of the One Horizon Foundation in the name of a director on March 24, 2011. According to the above-mentioned source, on October 11, 2010, EOS Asia Investment Company and Chengdu WorldServe Grandview Business Services Co., Ltd. signed a virtual office lease contract, renting an office address at the 18th floor of the Shangri-La Center, No. 9 Binjiang East Road, Chengdu. However, EOS Asia Investment Company did not register with the industrial and commercial authorities in Chengdu, and its actual office address was Room 1817, West Building, No. 19 Renmin South Road Section 4, Chengdu. Unfortunately, this actual office address is now deserted.
In fact, many former employees of EOS Asia have already left. Christian Arnell, mentioned in the article "The Killer of Chinese Concept Stocks Lurks in Chengdu, the Mysterious Trader is Hard to Find," recently clarified to the Everyday Economic Journal reporter that his work at the time mainly involved PE investment and administrative management. He left EOS Asia in 2010 and was unaware of the allegations regarding EOS Asia's involvement in shorting Chinese concept stocks.
Is Jon Carnes Playing a "Left Hand, Right Hand" Game?
What is the connection between EOS and Alfred Little, who consecutively shorted 15 Chinese concept stocks? The above-mentioned source told the reporter, "Jon Carnes is the short-seller Alfred Little who made huge profits by shorting 15 Chinese concept stocks. His business model is to manage funds through proprietary and other people's funds. Jon Carnes and Huang Kun first issued reports under the name IFRA, then provided them to Alfred Little." In other words, such a complex short-selling chain is merely 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 its secrecy," the person further pointed out, "they even had their phone cards purchased by travel agencies to avoid exposing their whereabouts."
In fact, the relationship between EOS executives and the company is also very complicated. Former EOS vice president Huang Biqiang 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 Biqiang works, that last October 12, Jon Carens had just inspected the Huayu Digital Industry Base located at the foot of Mount Qingcheng in Chengdu, and took commemorative photos with senior management including General Manager Huang Biqiang. However, when the reporter attempted to access the Huayu Digital official website yesterday, it was found that the system was under upgrade, and the webpage could not be opened.
After extensive investigations by Everyday Economic Journal reporters, they were still unable to contact relevant personnel from EOS to comment on the aforementioned claims.
Background Information
In September 2011, the Chinese concept stock Silvercorp listed on the Toronto Stock Exchange and the New York Stock Exchange faced a series of short attacks in the U.S. and plummeted 19% on September 14. Its short seller was Alfred Little, who consecutively questioned 15 Chinese concept stocks. Subsequently, Silvercorp discovered that the main orchestrator of the short attack was the EOS fund. Following this clue, the Everyday Economic Journal reporter conducted a series of investigations. In the previous report, the reporter found that EOS Asia had posted a job advertisement, and visited the actual workplace address of the company mentioned in the advertisement, Chengdu Shengji Investment Management Company, but did not find any more valuable information.
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