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Hin Chew Chung
Escape from Paradise ended Chung Hin Chew's IPO of X10 Wireless, because it exposed his incarceraion in Brunei. After its IPO failed, X10 Wireless filed for bankruptcy. |
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Before we go into the affairs of X10, let's take a look at Hin Chew is serious about his comic books ...
Unfortunately the maid had thrown the wrapper away. Fortunately, the maid and I found it ...
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Escape from Paradise ends X-10's IPO X10 declares bankruptcy! Debts may hit US$50 million! The Beginning of X10's Collapse On September 26, 2001, X-10 withdrew it's application with the SEC to go public. The fact that we sent the SEC a copy of Escape from Paradise certainly had something to do with that. On August 13, 2001 we received a letter from the SEC stating, "Thank you for your August 6th letter setting forth your additional concerns regarding X-10 Wireless Technology Inc, and enclosing a copy of a book about Mr. Hin Chew Chung." Here is what the SEC learned from Escape from Paradise: Hin Chew, the Prisoner From
Hin Chew, the Plot Thickens Immediately after his release from Brunei, Hin Chew flew to Hong Kong to meet with mysterious ex-CIA agent, Dan Arnold. Hin Chew’s father, S. P. Chung, emerged from hiding to attend the meeting. After the meeting, Hin Chew Chung flew to London where he hired Queen's Counsel Alexander Irvine, who later became Lord Chancellor of England, serving on the British Cabinet. The details and more are in Escape from Paradise.
YORBA LINDA, California, CNN, Oct 21, 2003 -- On October 7, three brothers, owners of Advertisement Banners.com,were awarded $4.3 million -- after accusing X10 Wireless Technology of trying to bully them out of business, and stealing their technology. The three brothers stand to win much more in punitive damages, which are set for hearing on November 18. One of the first big clients they landed was X10 Wireless Technology, a Seattle electronics firm. In short order, the company's security-camera ads were ubiquitous on the Internet, featuring women wearing little more than come-hither looks. But then, the brothers say, X10 stiffed them the $564,000 in advertising commission that the trio was due for the July 2001 business contract, money their company needed to pay for the Internet advertising space they had bought. Furthermore, the young men contended, X10 stole their proprietary technology and business model, and built its own Internet advertising business with some of Advertisement Banners.com's clients! "These were young guys who had a dream to start a successful company, but X10 looked at their youth and thought they could wipe them out," said Michael Fitzgerald, a lawyer for the brothers. |
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X10 declares bankruptcy. The lawsuit against X10 was, however, only the tip of the iceberg. Immediately after losing the $4.3 million lawsuit, X10 filed for bankruptcy under Chapter 11 of the Bankruptcy Code in U.S. Bankruptcy Court in Seattle. The filing reveals some financial details of a company that had made itself known throughout the Web for its ubiquitous pop-under campaign and yet remained secretive about its operations. X10 owes its creditors between $10 and $50 million. Other creditors include some of the Internet's best-known names, including Yahoo!, $346,000; Google Inc., $68,000; America Online Inc., $55,000; eBay Inc., $49,000; and Microsoft, about $459,000. X10 even owes $667,412 to its own lawyers, Sheppard Mullin Richter & Hampton of Los Angeles. But where are X10's financial records? X10 filed what the bankruptcy court termed a "deficient" filing, meaning that it lacked a statement of its financial affairs. The court set a 15-day deadline for the completion of the filing, or X10 risks a dismissal. |
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The End of X10
Home automation pioneer will no longer make powerline-based products for controlling lights, thermostats and other devices; closure has nothing to do with Black Hat hacking scandal. By Julie Jacobson, August 11, 2011 X10 is shutting down. It appears the company is headed into receivership and its factories will cease making products for controlling lights and other devices over the powerline. X10 will no longer make products based on the home-control protocol it created in the 1970s. Interestingly, the closure coincides with a high-profile report from Black Hat that X10 could be hacked, but that report most likely had nothing to do with X10’s demise. More likely, the company simply faced competition from newer home-control technologies such as Z-Wave (RF) and Universal Powerline Bus (powerline). Being the low-cost provider, X10 undoubtedly suffered from higher wages in China, where its products are manufactured. |
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Will X10's creditors ever see their money?
In Escape from Paradise, we explained CLEARLY what X10 was doing. X10 was generating losses in the US, and shifting over their profits to the parent company in Hong Kong. The profits most likely wind in the tax-free haven of Bermuda, at Chungco Bermuda Ltd, the holding company of X10 in Hong Kong. X10's creditors have a long way to go to catch up with the elusive Hin Chew Chung. From the book (bear in mind that S.P. is Hin Chew's father): S. P. was selling a company called Chungco Bermuda Ltd., which owned part of X-10, to Hin Chew for US$9,000.00. I was right, S. P. had been the backer of X-10, after all. Then the agreement got a bit more involved. In addition, Hin Chew had to pay S. P. S$2,665,848, which Chungco Bermuda owed to S. P. For one United States dollar, Hin Chew would buy “the X-10 share” from S. P., a good deal, but he would also have to reimburse S$540,000 to S. P. for additional X-10 “set up” expenses, and replace S. P.’s million-dollar line of credit for X-10. Finally Hin Chew owed S. P. personally another S$76,752, but then, somehow, S. P. also had a personal debt to Hin Chew of S$1.945,844. I had never seen such a crazy thing. I owe you, you owe me, I sell, you buy, my expenses … This shell game gave a telling picture of the mindset of the Chungs. The mindset was money. Chapter 66 - The X-10 Wireless Technology, Inc. IPO Hin Chew’s company, X-10 Ltd., and its maze of subsidiaries had been successful. How successful we can’t tell, since X-10 Ltd, the parent company, is still a privately held Bermuda corporation operating out of Hong Kong. In spite of his success, Hin Chew had not achieved his dream of “going public on the NASDAQ,” as he was still hindered by the problem “too much scrutiny.” To go public on the NASDAQ, you have to bare your soul to the United States Security and Exchange Commission. That was the problem. However, Hin Chew had been wrestling with the problem, and had come up with a brilliant solution. He would go public with a surrogate corporation, and hide behind a front man, one of his “stupid ang mohs,” or whites. Hin Chew chose George Stevenson for his front. In 1999, Hin Chew started a new venture, a division X 10 USA Inc., to sell X-10 products over the Internet. He set up offices for his new venture in Seattle, Washington. A second Microsoft? Not quite—Hin Chew’s new venture was losing money from the start. In July 1999, Hin Chew spun the new venture off from X 10 USA Inc., incorporating it under the catchy name of X10 Wireless Technology, Inc. However, the new venture continued to lose money, and X-10 Ltd had to pour millions into it just to keep it going. For the nine months ending in September 2000, the company, X10 Wireless, lost US$8 million on sales of US$21 million, losing 38¢ for each dollar of sales! The accumulated losses of X10 Wireless now amounted to US$ 17.6 million. X10 Wireless was looking like just another money-losing dot.com. That’s a lot of money to lose, even for Hin Chew, but he had an answer—go public! Turn this lemon into an IPO! Let the U. S. investor pick up the tab. How clever! Working quickly, by November 27, 2000, X10 Wireless had filed with the SEC for an initial public offering of 5 million shares to be priced at US$15, to suck in US$75 million from the U. S. investors. The SEC permitted X10 Wireless to reserve the ticker symbol, “XTEN,” for its NASDAQ listing. Hin Chew was on his way! Now comes the clever part—it’s all in the X10 Wireless Prospectus, duly filed with the SEC. After the IPO, the “existing stockholders,” Hin Chew and company, will own 20 million shares of XTEN, for which they paid only US$20 thousand, and the U. S. investors will own 5 million shares, for which they will pay US$75 million. That puts a market value on X-10 Wireless of US$376 million, of which US$301 million will belong to Hin Chew and company. Not bad for a money loser! Does anyone other than your trusted stockbroker, ever bother to read a prospectus? Does even the SEC ever read a prospectus—or do they just print what is fed to them? The SEC is all about disclosure. It’s their job to warn you. The SEC-approved prospectus is like the old warning on an iodine bottle, “POISON, DO NOT DRINK.” If you drink, the SEC is off the hook, because they warned you, didn’t they? If you’ve never taken the time to wallow through a prospectus, I’ve done it for you, making my summary short, painless, and, hopefully, a fun read. You are about to learn a lot, and it could save you some money. You might even learn how to get your own IPO going—just like Hin Chew. The X-10 Wireless Technology Inc. prospectus identifies Hin Chew as a director, stating, “Since 1989, Mr. Chung has served as chairman of our affiliate, X10 Ltd. Mr. Chung currently serves as chairman of Zhongli Investment Pte Ltd., his privately held investment company based in Singapore.” Very impressive, this guy’s the Chairman of Zhongli! We know what Zhongli is all about, but did the SEC look into what Hin Chew’s detention in Brunei was all about, and his relationship with the CIA guy, Dan Arnold? Are those facts included in the X10 Wireless prospectus? Of course not! The prospectus reveals that good old George Stevenson, revealing that he has been the CEO of X10 Wireless since its inception in 1999. George Stevenson, a large convivial fellow, the perfect front man, puts on a friendly face for Hin Chew in America—he’s done it for years. Even though Stevenson is the CEO of X10 Wireless, the prospectus tells us that he is not employed by the company, but receives an “annual management service fee paid by X10 Ltd,” which for 1999 came to US$264,000. The CEO of X10 Wireless is not employed by X10 Wireless, but by another company? Good thinking, Hin Chew, we’re learning. The prospectus warns, “Mr. Stevenson's and Mr. Chung's positions at X10 Ltd. could create real or apparent conflicts of interest in the event that they are faced with decisions that could have different implications for X10 Ltd. and us [X10 Wireless Technology Inc.].” I bet! It continues to get much better. The prospectus goes on to show that X10 Wireless is even more of a captive of X 10 Ltd., than I was of Hin Chew during our marriage. It discloses, “We depend on X10 Ltd., X-10 (USA) and other affiliates of X10 Ltd. to provide substantially all of our manufacturing and fulfillment services, to sell and distribute products to retailers and other resellers and to provide product development services.” In other words, X-10 Ltd. does “substantially all” the work of X10 Wireless, manufacturing, warehousing, selling, distribution, research and development—the works. So, what does X10 Wireless do? Does it do anything? Does it just run the Seattle office? No way! Hin Chew wants it all—a company called “Orca Monitoring Services” will run the office. Who in the hell is Orca? Why it’s a company owned by X-10 Ltd., of course. The prospectus tells us that X10 Wireless has an “Administrative Services Agreement with Orca Monitoring Services, a wholly owned subsidiary of X10 Ltd., under which Orca provides to us telephone reception services, customer service and technical support after our normal business hours, as well as general office administration and support.” The final instruction, in its directions on how to find its offices, X10 Wireless states “Enter lobby for Orca Monitoring Services and ask for X10 WTI [X10 Wireless].” Sounds like Hin Chew doesn’t even want to put the X10 Wireless name on the office door. All the normal functions of X10 Wireless, from manufacturing and selling its products, and even to answering the company telephone, have been signed away with binding contracts to X-10 Ltd, and its subsidiaries. X-10 Wireless has been bound hand and foot by Hin Chew—he always was a control freak. So, after having everything done for it by X-10 Ltd., and its subsidiaries, what’s left for X-10 Wireless to do? Get US$75 million from the U. S. investors—that’s what! If X-10 Wireless does well, good for Hin Chew. If it doesn’t do well, good for Hin Chew. The money can always be siphoned out of America, using the Chungs’ old ploys like “consultancy fee paid to a shareholder,” and “management fees charged to related party corporations.” Should any trouble arise out of this confusing corporate shell game-no problem, X-10 Wireless states in its prospectus that it will “indemnify” and “secure insurance” for its directors “for certain expenses, including attorneys' fees, judgments, fines and settlement amounts incurred.” Good idea, Hin Chew, and the protection is all at company expense, and tax-deductible, too! Hin Chew has found a way to go public in America, without exposing the mysteries of X-10 Ltd, and the Chungs. Welcome to the Chungs, America! |
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