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Yuhe International Inc (YUII US)

Year: 2011

Chicken producer Yuhe International was the product of a 2007 reverse merger. In June 2011, it was attacked by GeoInvesting alleging that the company was faking profits and hiding the evidence in fabricated cash balances and fake acquisitions. This prompted a collapse in the company's share price. On a special conference call arranged to refute the allegations, management let slip that the acquisitions had fallen through but instead of telling the market, the company made a series of new acquisitions. Later that month, the company's auditor resigned owing to management’s misrepresentation and failure to disclose material facts surrounding the acquisitions plus the discovery of off-balance sheet related party transactions. In July 2011, the NASDAQ issued a delisting notice. In October 2014, the SEC charged Yuhe and its CEO, Gao Zhentao with fraud and other violations of securities laws, resulting in a default judgment of US$56.9m against the company when representatives failed to appear in court. The company was highly likely to have been faking profits.

Last updated December 2021

The information on this page has been compiled from publicly available sources. GMT Research Limited has not verified the information and does not warrant its accuracy. Any claims made or views expressed are not necessarily those of GMT Research Limited.

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