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People's Daily Online>>China Business

Fraud investigations hurt Chinese companies

By Pucong Han (People's Daily Online)

14:33, March 01, 2012

CleanTech Innovation, Inc, a China-based U.S. company and manufacturer of wind towers, went public, in early July 2010, through a reverse merger - a private company purchasing a public shell company, thereby avoiding the requirements of an initial public offering.

On March 2, 2011, trading in CleanTech on the National Association of Securities Dealers Automated Quotations (NASDAQ) Capital Market was suspended and had not resumed, according to a review from the U.S. Securities and Exchange Commission (SEC).

However, they continually to trade on the Pink Sheets Electronic Quotation System, while appealing the NASDAQ suspension to the Listing and Hearing Review Council. According to the Council, “it was discovered that CleanTech had failed to provide a copy of its written submission to the NASDAQ staff.” The Listing and Hearing Review Council concluded that CleanTech had intentionally withheld documents in violation of NASDAQ rules and affirmed the Hearing Panel’s decision to delist the company’s securities.

The Deputy Executive Director of the Liaoning Provincial Government Small and Medium Enterprises Bureau, Chengfan Shan, said that CleanTech had lost more than $200 million in shareholder value after the delisting action. “[The delisting] has prevented CleanTech from participating in a $100 million job-creating project in New Jersey, part of the ‘Select USA’ program supported and advocated personally by President Obama and the Administration.”

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Leave your comment2 comments

  1. Name

PD User at 2012-03-0276.124.224.*
No ones" to blame BUT THOSE COMPANIES THAT GO TO U.S FOR IPO.They should NOT forget that no matter what, DiSCRIMINATION of Chinese/Asianis very strong in U.S much more to Chinese listed companies.Chinese officials MUST BAN CHINESE IPO IN U
Bob at 2012-03-0198.247.138.*
This article is saying that investigations into allegedly fraudulent activity by Chinese companies has a negative impact on those companies. That should be obvious. Is that a surprise to anyone? The article would be a little more interesting if there was some proof that these investigations were harming innocent companies. But as it stands, there"s absolutely no indication that these companies are legitimate beyond the word of company insiders. Maybe you should write an article about how these allegedly fraudulent companies are damaging the overall reputation of Chinese companies.

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