VZCZCXYZ0316
RR RUEHWEB

DE RUEHHK #0411/01 0660140
ZNR UUUUU ZZH
R 060140Z MAR 08
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 4311
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000411 
 
SIPDIS 
 
USDOC FOR 532/OEA/LHINES/ADYSON 
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR WILLIAM ZARIT 
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: PRE-LICENSE CHECK: WALASEY LIMITED 
 
REF: A) USDOC 00800 B) D390096 
 
¶1. Unauthorized disclosure of the information provided below is 
prohibited by Section 12C of the Export Administration Act. 
 
¶2. As per reftel A request and at the direction of the Office of 
Enforcement Analysis (OEA) of the USDOC Bureau of Industry and 
Security (BIS), Export Control Officer Philip Ankel (ECO), conducted 
a pre-license check at Walasey Limited, Room 2403A, 14/F, Nanyang 
Plaza, 57 Hung To Road, Kwun Tong, Kowloon, Hong Kong (Walasey 
Limited).  The purpose of the visit was to determine the suitability 
of Walasey Limited be a recipient of sixty analog to digital 
converters that are the subject of export license application 
D390096.  The items (ECCN 3A001) are valued at USD $5,640 and are 
controlled for national security (NS) reasons. The license applicant 
is Kenet, Incorporated of Woburn, Massachusetts. 
 
¶3.  A Hong Kong Companies Registry check of Walasey Limited reveals 
that the company was registered in June 1993.  Hong Kong resident 
Wu, Yuk Hung and mainland Chinese national Sheng, Shih Yun are 
listed as directors.  The company's paid-up share capital is the 
Hong Kong equivalent of approximately USD 80,000.  Further review of 
the Hong Kong Companies Registry reveals that a number of Hong Kong 
companies are related to Walasey Limited. 
 
¶4.  Companies related to Walasey through director Sheng, Shih Yun: 
Mr. Sheng is also a director in the following companies:  M2C 
Electronic Technology Limited, Electrend Industrial Limited and 
Walasey (China) Limited. 
 
¶5.  Companies sharing an address with Walasey Limited:  Bright 
Concept Trading Limited is collocated with Walasey. It has been in 
existence since 2000 and its directors are Hong Kong resident Wong, 
King Bor and mainland China national Zhang, Zhi Tong. 
 
¶6.  Mr. Wong, King Bor, director of Bright Concept Trading Limited 
is also a director in M2C (Hong Kong) Limited, M2C Electronic 
Technology Limited (mentioned above), Walasey Technology Limited, 
Well Time Technology Limited and Mega Bright International 
Enterprise Limited. 
 
¶7.  Mr. Zhu, Yan Hua (mainland Chinese passport number G00063728) is 
a director of Walasey (China) Limited as well as M2C Electronic 
Technology Limited, and Well Time Technology Limited (with Mr. Wong, 
King Bor). 
 
¶8.  In sum, Walasey Limited is related in one way or another to at 
least the following additional companies in Hong Kong:  Walasey 
(China) Limited, M2C Electronic Technology Limited, Well Time 
Technology Limited, Mega Bright International Enterprise Limited, 
M2C (Hong Kong) Limited and Electrend Industrial Limited. 
 
¶9.  On February 14, 2008, the ECO and Commercial Assistant, Carrie 
Chan visited Walasey Limited and met with Mr. Ricky Law, Deputy 
General Manager of Walasey Technology Limited.  He stated that 
Walasey Limited was established in 1994.  It is the distributor and 
representative for certain brands of electronic components.  It is 
primarily an electronic components reseller and has six offices in 
mainland China.  The Hong Kong office acts as the contact window 
between those offices and outside suppliers.  This is because many 
of the company's employees in mainland China cannot speak English 
well and it is also easier to get items through mainland China 
customs via Hong Kong.  In effect, Walasey Limited acts as a 
consolidator and customs broker for items being sent to customers in 
mainland China.  Mr. Law stated that for some components, Walasey 
Limited is the exclusive distributor, while for others it is one of 
many (e.g., Kenet Inc.).  Walasey Limited's business focus is on 
communications components (base stations for SCDMA) and consumer 
applications (i.e., web cams and radio controlled clocks). 
 
¶10.  As to the other related companies, Mr. Law provided the 
following background at the meeting and by subsequent e-mail: 
 
Walasey Technology Limited:  Registered but not active. 
 
Bright Concept Trading Limited:  Owned by Mr. Zhang Zhi Tong (99.5 
percent) and Mr. Wong, King Bor (0.5 percent).  According to Mr. 
Law, this company is involved in the electronics trading business. 
 
M2C (Hong Kong) Limited:  Registered but not active. 
 
M2C Electronic Technology Limited:  This company is a developer, 
producer and marketer of business information displays 
(www.m2c-electronics.com).  During the February 14th visit, Mr. Law 
showed the ECO and Commercial Assistant Chan the premises of this 
company, located next door to the offices of Walasey Limited. 
According to Mr. Law, this company produces and manages the content 
display for nationwide information screens in various businesses. 
The R and D for this company is conducted in Fuzhou, mainland 
 
China. 
 
Mega Bright International Enterprise Limited:  Electronics trading 
company. 
 
Well Time Technology Limited:  Electronics trading company. 
 
Electrend Industrial Limited:  Electronics trading company. 
 
¶11.  As to the specific items in question, Mr. Law stated that there 
were two potential customers for these items.  The first is Jiangsu 
Luyang Electronic Instrument Group Co., Ltd. (www.lvyang.com).  By 
subsequent e-mail, Mr. Law provided the ECO with an internal order 
form from Walasey's Shanghai office and filled out by the company 
(located in Jiangsu province).  According to Mr. Law, this 
customer's project (involving the production of oscilloscopes) is 
still in the planning stages and they are only requesting a sample 
of the product. 
 
¶12.  According to Mr. Law, the second customer for the applicable 
items is Nanjing Nanrui electronic Tech Co., located in Nanjing, 
mainland China.  According to Mr. Law, this second customer will use 
the items in the production of high resolution medical devices. 
 
¶13.  The ECO found Mr. Law to be open and cooperative.  His 
explanations appeared credible and generally consistent with 
information independently obtained by the ECO.  At the same time, 
ECO is concerned by the large number of collocated and interrelated 
companies uncovered during this check and the lack of an apparent 
clear delineation between these companies and their business 
purposes.  Also, aside from the web site for Walasey and M2C, none 
of the other companies appears to have any web presence (typical for 
many electronics trading firms). 
 
Cunningham