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Feihe International Inc (ADY US)

Year: 2012

Milk powder company Feihe was the product of a 2003 reverse merger and began trading on the NYSE Arca Exchange in 2005. In April 2010, the company fired its auditor Grant Thornton after it expressed an adverse opinion on the effectiveness of the company’s internal controls. The 2008 Chinese milk formula scandal had put Feihe's share price and financials under pressure. This lead to its venture capital partner, Sequoia, ending its cooperation agreement in February 2011 reportedly due to Feihe's failure to meet share price targets. Less than two years after having dismissed Grant Thornton, in December 2011, Feihe dismissed auditors Deloitte for expressing a going concern qualification. Feihe was then attacked by a blogger on Seeking Alpha who highlighted the company's difficult financial position in early September 2012 and then alleged fraud in mid-September owing to discrepancies between SAIC and SEC filings. In March 2013, the company announced that it was going private and then delisted in April. It has since relisted in Hong Kong. Fraud allegations remain unproven.

Last updated October 2021

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