The Securities and Exchange Commission has now charged two China-based executives with defrauding investors. The charge is that these investors believed that they believed they were investing in a Chinese coal business “when in fact they were investing in an empty shell company.”
More specifically the SEC noted, “Chairman Ming Zhao schemed with former CEO Liping Zhu to steal and sell Puda Coal’s sole revenue-producing asset, a coal mining company named Shanxi Puda Coal Group.”
The long and short of it is that Zhao is accused of secretly transferred Puda Coal’s controlling interest in Shanxi Coal to himself and he then sold a substantial portion to a fund controlled by “what is reported to be China’s largest state-owned financial firm.” The move is said to have given Zhao the profits rather than Puda Coal’s public shareholders.
What is amazing is that Puda Coal (PUDA) still trades as a stock. At $0.27, the 52-week range is listed on Yahoo! Finance as being $0.05 to $13.05.
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