China Valves was a China-based US listed stock formed through a reverse merger in 2007.
In September 2013, SEC alleged that, in 2011, CVVT materially overstated income and understated liabilities incurred by a wholly-owned subsidiary, Shanghai Pudong Hanwei Valve Co., Ltd (“Hanwei Valve”). Hanwei Valve purchased a valve with the plan to reverse engineer the product but, because of intellectual property concerns, intentionally disguised the payments for the valve in its books and records as VAT payments purportedly made to the local tax authorities. China Valves, Fang, Wang, and Tang violated antifraud provisions, violated reporting, recordkeeping and internal controls provisions of the federal securities laws. Directors Fang, Wang, and Tang falsely certified that China Valves’s and aided and abetted China Valves’s violations of the reporting and books and records provisions. SEC won its case in May 2015. The stock was delisted in October 2014.
Citron Research: China Valve Technology – Destined to Get Delisted, 13 Jan 2011
China Valves: Transition Report Jan 2011 to Sep 2011