An urgent investigation report for CHBT company is being sent to many fund managers ' emails

CHBT is a Nasdaq listed company, the Chinese name Shanghai Double Gold Biotech Co., Ltd. (China-biotics Inc.). The Shanghai company has been haunted by the controversy for several months. Recently, the U.S. investment agency against China in the U.S. listed companies financial misrepresentation, CHBT is experiencing the most massive round of questioning.

CHBT shares plunged 11% in the past week. Analysts told the newspaper reporter, "citron report is the key." August 31, the United States, a company named Citron Institute issued a CHBT: where is the store? 》。 On that day, the CHBT Web page was suddenly updated to disclose the addresses of its more than 100 stores.

In the September 1 report, citron A number of addresses through the electronic map search again after questioning, "Where is the store?" ”

"The rare Blitzkrieg. One of the fund managers who received the report said.

The flames of war have already boiled over, not just a Chinese concept stock. Since the recent investigation of the bankrupt millionaire Xujiesheng, the reporter has received the relevant allegations of materials, the Nasdaq's most sought after CHBT also ranked among them. (See this newspaper July 22, August 31 front page report)

This reporter survey shows that although CHBT and Xujiesheng have no direct connection, but in its path to become a popular stock, has been deeply xujiesheng rely on the "circle"-it may be Xu Jieyuan in China, but has been able to evade the U.S. regulatory system for many years.

The huge benefits of the "circle" have attracted the world's leading auditors, investment banks and law firms focused on Chinese companies.

"Shell" is their common business.

"The outside world has misunderstood us. "On the night of September 1, Xujiesheng told our correspondent on the phone that he has been as an investor in China to find opportunities for small and medium-sized enterprises," we have invested in the company, how can we make it fake? ”

Allocation: "Circle" take 35% equity

"The Xujiesheng took more than 35% per cent of the equity. "In the August 31 newspaper report, a Xujiesheng Kibaki actively in the phone.

The Xujiesheng Kibaki, who declined to be named, said the reason for Xu's taking of the stake was the cost of listing the package, and the second was that it said it needed to "manage" relevant institutions in the issue of additional and underwriting. "We take 10%-30%." Xujiesheng responded that the company listed, his contribution to pay shell, lawyers, PR and other costs, "to these shares listed companies." ”

He cited an example from the Gulf Resources Company (Gulf), "We continue to invest tens of millions of them." "Xujiesheng said that these inputs can be found in the public company bulletin," are offshore companies injected capital. ”

"A lot of companies are complaining about Xujiesheng, especially if he doesn't make all the stocks work." "said the person.

According to many reporters, Xu in the domestic team, a part of the responsibility for the search for a variety of corporate resources, including local government visits and cooperation. From the site of Xu team, they through the Sino-US investment Strategy Group, China Bridge Capital, Shenzhen, China Silver Investment guarantee Company and other main bodies, with a lot of local government contact is very tight.

The other part is responsible for the account and other packaging, generally 2-3 people a group. "To succeed in one case, the team can have a 50,000 dollar reward." ”

But, after all, Xu can not get the U.S. market trust alone, across the ocean, "he looked for more collaborators." ”

"Xujiesheng's circle is able to hold more than 30% per cent of listed companies, rather than being noticed in SEC filings, mainly by diversifying holdings through offshore companies." The Xujiesheng Kibaki said.

This reporter inquires Xujiesheng circle of some companies found that there are indeed some difficult to see in the public information investment institutions in the initial or additional shares in the company.

In fact, Xu's approach is to use the two countries ' information is not right. ”

Joint effort: the interests entanglement of underwriting institutions

20 days ago on the Hawaiian island, Roche Capital began another year of investor dinners.

The agency has introduced itself, and its Chinese companies are listed on the market, already worth more than billions of dollars. In the hands of the reporter Roth capital underwriting customer records in the past two years, Roche's underwriting of Chinese stocks, including Oriental paper (ONP), Shanghai Double Gold (CHBT), China Green Agriculture (CGA) and other highly-challenged.

However, just before the feast began, Rosen, New York, published its petition for a group action against the Orient Paper, which was listed as responsible for the IPO of the Oriental paper in March.

Class action representative Mark Henning told the newspaper reporter, "Roche Capital is undoubtedly responsible." "The attorneys ' lawyers have long been the main business of this kind of class action," Roche Capital is the company we often encounter. "The New York Rosen lawyer also said that the issuance of additional underwriting agencies is responsible for the due diligence of listed companies."

Now, Roche is likely to run into more trouble.

Citron, who identified the Shanghai double Gold forgery, was named Andrew left, according to industry sources, behind Andrew left is some short capital. "Counterfeiting is really good for them, but the institution has been in existence for several years and has accumulated some credibility," he said. ”

The Securities and Futures Commission (SEC) documents show that Shanghai double Gold exceeded 690,000 shares in October 2009, valuing about $74.9 million. Andrew Left's survey said many stores were non-existent, and reports were even accompanied by store photos-some not selling biological products, but snack shops.

Another customer of Roche. China's green agriculture, after more than a year of questioning, has been the famous financial magazine Barron's name, its fake way and Xujiesheng team similar. The company has now been abandoned by investors.

Roche's whereabouts are still housetops. This reporter interviewed learned that in the past year by the United States research institutions questioned by the Chinese concept stock underwriters, Roche is often with some familiar investment bank, the company appeared together. Whether or not these institutions form a stake is already the focus of investors.

Remarkably, the two investment banks were almost as close as Roche was responsible for underwriting the shares of Eastern paper and Shanghai double Gold. One is Chinamerica Fund, often appearing in the name of Chinamerica. The other is Pope Asset Management, also often in halter Financial Group,pope Capital and other entities, in fact, these companies ultimately control the Parr and halter two families, Among them halter to Usx Chinese Enterprise index is more famous, its responsible person calls itself "the American Backdoor King". (hereinafter referred to as "the Department of the") people familiar with this reporter analysis, these investment banks often participate in the "Problem" project.

Among them, the alleged forgery of Shanghai double Gold, Oriental paper are both the Walt Department and Roche jointly promote. Shanghai double Gold by the Roche IPO, but the department of Walt in 2007 with the double gold signed a negotiable instrument agreement, the agreement in the 25 million U.S. dollars to buy a double gold 4 million shares, agreed that before December 11, 2010, such as double gold price of more than 12 U.S. dollars, can be exchanged, if not to reach this share price, The double gold pays the annual interest 10% to the Walt Department.

"Luo's promotion, obviously to the Walt Department is a huge positive." The Walt Department will also press. "The above analysis. In fact, Roche's name has been seen in the investment disclosures of the department's funds.

Chinamerica fund claiming to be a Texas investment bank, this reporter found that it was the first to do the Chinese Agritech Inc listed underwriting, while the department of the Halter Financial Group also bought a large number of the shares. Another Chinese company, Dalian Fushi, has also been underwritten by two investment banks.

Xujiesheng, which drives the Nasdaq-listed travel World Group (Universal Travel), the Gulf Resources Corporation (Gulf), and the Roche-challenged Chinese green agriculture, has also been underwritten by Chinamerica fund and the Walt.

Chaos: Lawyers, accountants and independent directors

Where are the people responsible for audit supervision, even if the problem companies are repeatedly evading the underwriting due diligence process?

In the circle.

This reporter learned that the concept of the underwriting institutions have another major interest in the company can obtain independent director of the decision. For example, Chinamerica Fund and Walter are required to control the offshore company of a listed company, or to require the CFO or independent director to appoint an offshore company for approval prior to the appointment of an independent director in Agritech, Dalian Fushi.

Wang (wenbing Christopher Wang) served as CFO for Dalian Fushi in 2005 for Chinamerica support.

A few years later, Wang became an independent director of Oriental paper, which he received 4000 shares in 2009, according to the company's announcement. Oriental paper is also the territory of the Walt and Roche, "The king should have a very close relationship." October 7, 2009, The Walt Department participated in underwriting 2083333 shares of Oriental paper. 21 days later, Wang became an independent director.

What is more paradoxical is that the August 15, the Eastern Paper and Chinamerica Fund company signed a paper consulting contract, "access to a variety of capital strategy advisory services, and to help the company October 7 (Reporter note: and the Department of Walter and other institutions) equity trading."

But the price of oriental paper is quite high. The company will allot 280,000 shares of stock to Chinamerica to gain profits. If Oriental paper already sells shares to the public based on the Walt system, how can we find another advisory body?

All this, the relationship between the two investment banks is questionable. Liu Zhenyong, Chairman of the Oriental paper, July 21 to the reporter said that the OTCBB to Amex from the board, mainly relying on a "Tennessee" investment Bank to carry out various operations. The Pope investment company, which is involved in the Oriental paper business, is here.

Bernstein, another independent director of Oriental paper, showed the ecology of accountants in the circle.

After Bernstein and Wang as independent directors, Oriental Paper decided to replace the original audit Office by BDO Hong Kong accounting firm. Bernstein is a partner of Bernstein and Pinchuk, an audit firm founded in New York in 1983 and a member of the BDO Seidman Alliance, which has offices in Beijing and Guangzhou.

BDO long-term in the industry in the "four" after the fifth position, but its scale expansion mainly by the alliance completed. According to one of Hong Kong's four major accounting accountants, BDO Hong Kong is also a local alliance in the form of BDO, "internal control is likely to be inadequate." ”

Among the Xujiesheng operating stocks are the Gulf Resources Corporation (Gulf), which BDO Hong Kong as the incumbent audit firm. Shanghai double Gold also from 2006 to date by BDO Audit listed business, but the double gold industry and commerce data shows that its subsidiary subsidiary of the financial data and listed companies far apart. In addition, another BDO China High Speed Channel (CCME), which is audited by Hong Kong, has recently been blamed for the gap between the financial data and the listed companies.

"Auditing of listed companies must in principle be an external investigation." "For the BDO of the same kind of problems, the accountant said," may be the Chinese company tax evasion, but if the gap is too large, the listed company's data authenticity. ”

Before and after Bernstein's inauguration, Oriental paper had paid Srff 15000 shares on the grounds that the law had provided it with legal services, but the journalist had not found any relevant information about the company before the firm in the document. The firm and Bernstein have served with some Chinese companies.

The Loeb & LOEB headquarters of the Shanghai double-gold service is in New York and has a close relationship with Roche, which has sponsored Roche's activities. Mitch Nussbaum, head of the firm's China business, recently had to deal with the East paper investigation, which he was responsible for legal aid after the incident.

"(Oriental paper) These people are listed companies to find their own, I do not know." Xujiesheng denies the existence of "circles". He insists that the bosses left him behind Wall Street.

Xujiesheng also said, "The money now used for investment is not my personal, there are many shareholders, I am just the sponsor of the investment group, and do not often manage the company's specific business." ”