By Greg Hazley
Sitrick and Company has been called in by China Green Agriculture, the Xi’an-based fertilizer company that is the subject of an informal inquiry by the U.S. Securities and Exchange Commission.
China Green lists shares on the New York Stock Exchange after “going public” in 2007 in a process known as reverse merger.
The company said through Michael Sitrick that its U.S. legal counsel has provided a report on issues of interest to the Los Angeles office of the SEC in response to an informal inquiry.
The inquiry covers discrepancies between its financial results filed in the U.S. and those filed in China, according to a Chinese news report.
The Street reported that China Green is one of more than a dozen Chinese companies that SEC investigators have shown interest in examining. The financial news outlet said a research firm, J Capital, released a report last week citing evidence that China Green “vastly inflated” its sales and profit figures reported to investors. In a Jan. 12 statement from Sitrick, the company said “allegations” coming from “admitted short sellers” are “largely inaccurate.”
Bloomberg Businessweek on Jan. 13 published a 4,600-word feature, “Worthless Stocks from China,” on Chinese companies that went public in the U.S. through reverse mergers. China Green is among several companies being probed for reporting irregularities.
CGA shares were trading around $7.95 on Jan. 14, at the low-end of a 52-week range of $6.81 to $17.00. Revenue for the year ending June 30, 2010 was $52.1M.
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