ChinaCast Education (ChinaCast) originally listed on the Singapore Exchange in May 2004 but was acquired by a US OTC-listed SPAC in December 2006. In February 2011, due diligence researcher OLP Global published a report which raised concerns that the company had overpaid for acquisitions and was possibly embezzling funds. Later that year, in November, short-seller Kerrisdale Capital released a report accusing the company of faking its sales and profits. Neither report appeared to have much impact on the share price. However, between December 2011 and January 2012, a board room tussle resulted in the ousting of the old management team. The ex-CEO wold not relinquish control and obstructed the audit. Three months later, in April 2012, ChinaCast's shares were suspended as it was unable to publish FY11 results on time. Share trading recommenced in July at a fraction of the prior level. In December 2012, the company announced that its FY09-FY10 results could no longer be relied upon and that the results of an investigation had found substantial financial irregularities. In September 2013, the SEC charged ChinaCast’s old executive team with fraud and insider trading. The company triggered our Fake Cash Flow Fraud model for the entirety of its listed history. It is a confirmed fraud. 

Last updated February 2022

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