Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (42219)	4/8/2011 10:14:07 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78705

>>Now I dont know what the law is in china about pilfering from a company that you manage, but I can see a bunch of lawsuits and may be a couple of public executions over this one.<< Executions won't happen in this case. As far as Chinese law is concerned, this is a private company not a public ones. Shareholders in the US can sues the empty holding company in the US or the shell company in in the Virgin Island. There is no extradition treaty between US and China so I don't think that would go anywhere. FWIW, this bugger still trades at 6$/share - the business sounds already fishy - i never even heard about a coal washing industry before. Coal is typically washed in and industrial sprayer right out of the conveyor coming from the mine. it does not make sense to move coal for such a simple operation from one company to the other, imo.

To: Madharry who wrote (42219)	4/11/2011 10:11:07 AM
From: E_K_S	Respond to of 78705

Re: Puda Coal Inc. (PUDA) by: Alfred Little April 11, 2011 \| about: PUDA Puda Coal Chairman Sells Half the Company; Pledges the Other Half to Chinese PE Investors seekingalpha.com From the article:"...Chinese RTO Puda Coal, Inc (PUDA) Chairman Ming Zhao transferred the ownership of PUDA’s sole Chinese operating entity, Shanxi Puda Coal Group Co., Ltd (“Shanxi Coal”), to himself in 2009 without shareholder approval according to official government filings. Then, in 2010, Zhao sold 49% and pledged the other 51% of Shanxi Coal to CITIC Trust Co., Ltd (“CITIC”), a Chinese private equity fund, for RMB245 million ($37.1 million). Zhao then recklessly leveraged Shanxi Coal by borrowing RMB3.5 billion ($530.3 million) from CITIC at an incredibly high 14.5% annual interest rate (including fees) to finance the development of its coal mines. PUDA shareholders are completely unaware of these transactions that decimate the value of its U.S. listed shares...." -------------------------------------------------------------------- Is this really fraud or just typical (unethical) Chinese management style? Apparently the motivation for his decision was due to Government mandated consolidation of Chinese coal companies. As a result, shareholders lost a significant amount of value in their company w/o their approval (no shareholder's vote). There were some shady asset transfers which could be construed as fraud. EKS