ShengdaTech developed, manufactured, marketed and sold Nano-Precipitated Calcium Carbonate (“NPCC”) products, which were used in a variety of products, such as tires, ink, paint, latex, paper, and polyethylene products. It listed via a reverse merger.
The Company: (i) falsified its reported sales; (ii) vastly overstated the amount of goods it purchased from Chinese suppliers; (iii) falsely overstated its customer base and the amount of business conducted with those purported customers; (iv) participated in undisclosed related party transactions; (v) forged and presented counterfeit United States Certificates of Deposits (“CDs”); (vi) misstated cash accounts held in certain Chinese banks; (vii) falsified information on value added tax (“VAT”) invoices; (viii) operated the Company with, and improperly failed to disclose, material deficiencies in the system of internal control over its financial reporting; and (ix) issued materially false and misleading financial statements in violation of U.S. Generally Accepted Accounting Principles . On April 29, 2011, KPMG HK formally resigned as ShengdaTech’s auditor.
US District Court: Legal Document, 28 Oct 2013
ShengdaTech: Annual Report 2009