Glancy Binkow & Goldberg LLP announces that the Securities and Exchange Commission (SEC) has filed a lawsuit in the United States District Court for the Southern District of New York against the Chairman and the former Chief Executive Officer of Puda Coal, Inc. ("Puda" or the "Company") (Nasdaq:PUDA), alleging violations of, among other things, the Securities Act of 1933 and the Securities Exchange Act of 1934. Glancy Binkow & Goldberg LLP is the court-appointed Co-Lead Counsel in a securities class action lawsuit, also pending in the Southern District of New York, which was filed in April 2011 and seeks to recover shareholder losses on behalf of all persons or entities who purchased Puda common stock and call options, or sold Puda put options between November 13, 2009 and October 3, 2011 (the "Class Period"), and also on behalf of purchasers of Puda shares pursuant and/or traceable to the Company's December 8, 2010 public offering of its common stock. The lawsuit filed by Glancy Binkow & Goldberg LLP, In re Puda Coal Securities Inc. et al. Litigation,Case No. 11-CV-2598-BSJ, alleges violations of federal securities laws and has been assigned to United States District Judge Barbara S. Jones.
A copy of the amended Consolidated Shareholder Complaint filed by Glancy Binkow & Goldberg LLP is available on the firm's website at www.glancylaw.com. Copies of the SEC Complaint are available on the SEC's website at www.sec.gov. Please contact us by phone to discuss these actions or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email to shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com.
Puda purports to supply metallurgical coking coal to the industrial sector in the People's Republic of China (PRC) through the Company's indirect equity ownership in Shanxi Puda Coal Group Co., Ltd. ("Shanxi Coal") – a PRC-based coal mining company and Puda's sole revenue source. The SEC Complaint alleges that the Company's Chairman, Ming Zhao ("Zhao"), with the knowledge and complicity of former CEO Liping Zhu ("Zhu"), "looted" the Company by secretly transferring Puda's controlling interest in Shanxi Coal to Zhao, through a series of transactions which the Company failed to disclose in its periodic financial reports. Specifically, the SEC alleges that in September 2009 Zhao transferred Puda's 90% stake in Shanxi Coal to himself, and subsequently transferred a 49% ownership interest in Shanxi Coal to CITIC Trust Co. Ltd. ("CITIC Trust"), a private equity fund controlled by the largest state-owned investment firm in the PRC. Zhao then caused Shanxi Coal to pledge 51% of its assets to CITIC Trust, as collateral for a $370 million loan to Shanxi Coal, and in exchange Zhao received more than 1.2 billion preferred shares of an investment trust holding CITIC Trust's 49% stake in Shanxi Coal.
The SEC Complaint alleges that Zhao and Zhu failed to disclose the foregoing transactions to investors, and further alleges that in 2010 Puda conducted two public offerings – purportedly to raise capital for mine acquisitions by Shanxi Coal – without disclosing that Puda no longer owned any ownership stake in Shanxi Coal. As a result, CITIC Trust was selling interests in Shanxi Coal to Chinese investors, at the same time Zhao and Zhu were misrepresenting to U.S. investors that Puda still owned a 90% stake in that company.
Likewise, the shareholder class action alleges that Puda was able to raise more than $100 million from public investors by selling shares in what was effectively an empty shell company, netting roughly $14.5 million of illicit proceeds from the sale of approximately 2.9 million shares of Puda stock in a February 2010 offering, and an additional $108 million from the sale of 9 million shares to public investors in a December 2010 secondary offering of common stock, which was underwritten by Macquarie Capital (USA) Inc. and Brean Murray, Carret & Co., LLC.
If you purchased Puda shares pursuant to the Company's December 8, 2010 public offering of its common stock, if you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Lionel Z. Glancy, Esquire, of Glancy Binkow & Goldberg LLP,1925 Century Park East, Suite 2100, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224, by e-mail to shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com.
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Contacts:
Glancy Binkow & Goldberg LLP, Los Angeles, CA
Lionel Z. Glancy
310-201-9150
or 888-773-9224
shareholders@glancylaw.com
www.glancylaw.com
