“Mens rea” is Latin for “guilty mind”, and is a foundational legal concept in many jurisdictions. Simply put, it’s the intention to commit a crime. Often, when a PRC-based company is accused of fraud, management and their supporters try to brush the accused conduct aside as innocently following local business practices. (See for example, former Sino-Forest chairman Allen Chan’s
“odd is not fraud” defense.)
ANTA undertook a series of transactions shortly after its IPO that convince us that ANTA insiders always intended to defraud outside investors, and enrich themselves at investors’ expense. In 2008, insiders stripped the company of a valuable asset, its international brand retail business, and attempted to conceal this fact. Similar to how ANTA controls its distributors, the insiders utilized proxies.
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