主题：【原创】补丁：中国政府为什么接受外国法院管辖―湖广铁路债券案 -- 抱朴仙人

Chinese bonds valuable?

Investors demand cash after 88 years

Paula Moore

Business Journal Senior Reporter

A group of American investors led by a Denver-area energy industry consultant is demanding that the Chinese government make good on bonds it believes to be worth billions of dollars and that were issued by a previous government nearly a century ago.

C. William Arrington, head of Golden-based C. William Arrington & Associates LLC, and a Texas investor are trying to get the U.S. government to pressure the People's Republic of China to repay the bonds.

They've asked the Foreign Bondholders Protective Council to take up their case, and the council has said it will study it, according to a recent USA Today story. They've even created a foundation staked by the bonds in the hope that President George W. Bush will use a 1933 law that allows him to help U.S. citizens seeking repayment from foreign governments when it's in the public interest.

The bondholders' battle has been uphill so far, even though there's precedent for such bonds' repayment. The Arrington group's bonds are formally called 1913 Chinese Reorganization gold bonds.

International law generally holds that bonds issued by one government should be honored by a succeeding government.

In the late 1980s, the British government convinced the current Chinese government to pay holders of a variety of Chinese bonds in Britain 20 million pounds ($28.3 million at today's exchange rate). Besides the 1913 issues, those bonds also included ones for a huge Chinese railroad and public works projects in what's now Hebei Province. Only 10 percent of the outstanding bonds were redeemed.

For the most part, though, the U.S. government considers the bonds worthless, except for their historic value, because they're so old. They went into default more than 50 years ago, having gone unpaid past their 30-year maturity date.

The Securities and Exchange Commission's central regional office in Denver has even had dealings with that bond issue. A few years ago, the office investigated and sued a used car salesman in Kissimmee, Fla., who it found to be fraudulently selling the Chinese bonds as securities through his British Virgin Islands-based investment company.

In 1997 and '98, the salesman, Peter J. Zaccagnino III, sold more than 70 kinds of historic bonds, including 1913 Chinese government issues, for $14,000 to $330,000 each, according to the SEC. He made nearly $5 million from those sales.

In late 1998, a federal court in Orlando, Fla., agreed with the SEC that Zaccagnino's bond dealings were fraudulent and ordered him, and his associates, to stop selling securities. The court also froze their assets.

"We investigated those bonds," said Michael MacPhail, assistant director of the SEC's Denver office, referring to the Chinese Reorganization bonds. "We generally alleged that they were without any investment value. They're just collectible memorabilia."

The U.S. Foreign Claims Settlement Commission decided against those attempting to redeem 1913 Chinese bonds a few decades earlier. The commission held in the 1970s that China's current government is not responsible for repaying them.

It's not known if Zaccagnino sold Arrington and his group their Chinese bonds.

Efforts to contact Arrington for this story were unsuccessful. Voicemail messages left at a telephone number listed as his company's by an online phone directory were not returned.