A class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of Puda Coal, Inc. (AMEX: PUDA) between November 13, 2009 and April 11, 2011, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). The complaint charges Puda and certain of its officers and executives with violations of the Exchange Act. Puda describes itself as a leading supplier of premium high grade cleaned coal used to produce coke for steel manufacturing in China.
The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. Specifically, the complaint alleges: (i) that, prior to the beginning of the Class Period, certain of the individual defendants fraudulently transferred Puda’s ownership interest to defendant Ming Zhao; (ii) that Puda was nothing more than a shell company during the Class Period; (iii) that Puda’s reported operating results and financial condition were materially overstated; (iv) that Puda’s financial statements were not fairly presented in conformity with U.S. Generally Accepted Accounting Principles and were materially false and misleading; (v) that Puda was operating with material deficiencies in its system of internal control over its financial reporting; and (vi) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.
On April 8, 2011, Puda issued a press release announcing that it was currently reviewing the allegations regarding improper share transactions by defendant Ming Zhao, which were published in an article entitled “Puda Coal Chairman Secretly Sold Half the Company and Pledged the Other Half to Chinese PE Investors” by a short-seller that same day. In reaction to the short-seller’s article and the Company’s press release, shares of the Company’s stock declined more than 34% on April 8, 2011, on extremely heavy trading volume.
On April 11, 2011, Puda announced that it had unanimously ratified the Audit Committee's decision to launch a full investigation into the allegations raised in the short-seller’s article alleging various unauthorized transactions in the shares of a subsidiary company, Shanxi Coal. The April 11, 2011 press release noted that, “[a]lthough the investigation is in its preliminary stages, evidence supports the allegation that there were transfers by Mr. Zhao in subsidiary ownership that were inconsistent with disclosure made by the Company in its public securities filings. Mr. Zhao has agreed to a voluntarily [sic] leave of absence as Chairman of the Board of the Company until the investigation is complete.” In response to the above announcement, trading in the Company's stock was halted on April 11, 2011.
If you are a current shareholder and purchased during the period November 13, 2009 and April 11, 2011 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.