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Subaye Inc (SBAY US)

Year: 2011

Chinese online video service provider, Subaye, appeared to be the product of a 2004 reverse take-over. In March 2011, it was targeted by short-seller GeoInvesting in a series of reports alleging fraud. A few weeks later, in April 2011, its auditor resigned citing an inability to verify cash balances and various transactions. In May 2013, the SEC charged Subaye and its former CFO with fraud, alleging that they had misrepresented the company’s business and operations, deceived its auditors, and misled investors. Our analysis suggests that fake profits in FY08 and FY09 were parked in fabricated receivables, deposits, fictitious capitalised software and cash; however, large losses in FY10 suggest the company appeared to be trying to purge fake profit from its balance sheet. The company is a confirmed fraud.

Last updated Februuary 2022

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