Formerly Asia Automotive Acquisition Corporation, Tongxin manufactures vehicle parts. Starting from June 30, 2010, Tongxin began to disclose problems, including its failure to timely file audited consolidated financial statements with the SEC, the delisting of the company’s stock on NASDAQ, its lowered expected revenues for fiscal year 2010, removal of key executives, and the announcement of its lawsuit against former Chief Executive Officer Rudy Wilson and Chief Financial Officer Jackie Chang for embezzlement. According to a Tongxin press release, an internal investigation exposed several questionable actions by the CEO and CFO, including the transfer of funds to personal accounts. Tongxin sued its CEO and CFO alleging Ms. Chang conspired with Mr. Wilson to embezzle $1.5 million from Tongxin’s bank account.
US District Court: Class Action Complaint, 3 Jan 2011
Class Action Central: Shareholders Sue Tongxin International over Misleading Financial Statements, 15 Jan 2011
Tongxin International: Annual Report 2008