Puda Coal, Inc.
Robbins Umeda LLP Announces an Investigation of Puda Coal, Inc. for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, is interested in helping shareholders of Puda Coal, Inc. (NYSE AMEX: PUDA). The firm has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Puda. Puda supplies metallurgical coking coal to coke and steel producers for the purpose of making the coke required for the steel manufacturing process. The company was founded in 2004, is headquartered in Taiyuan, the People’s Republic of China, and is incorporated in Delaware.
Robbins Umeda LLP’s investigation focuses on whether the directors and officers of Puda harmed the company by engaging in self-dealing. On April 8, 2011, an investor website disclosed that Puda’s Chairman Ming Zhao transferred ownership of Puda’s sole Chinese operating entity, Shanxi Puda Coal Group Co., Ltd, to himself in 2009. Then, in 2010, he sold 49% and pledged the other 51% of Shanxi Coal to Chinese private equity fund CITIC Trust Co., Ltd for RMB245 million ($37.1 million). Zhao then leveraged Shanxi Puda Coal by borrowing RMB3.5 billion ($530.3 million) from CITIC Trust Co. at an incredibly high 14.5% annual interest rate (including fees) to finance the development of its coal mines. Disclosure of the adverse information caused Puda’s stock to lose more than a third of its value on April 8, 2011.
On April 11, 2011, Puda’s Audit Committee launched an investigation into the allegations. The company has stated: “Although the investigation is in its preliminary stages, evidence supports the allegation that there were transfers by Mr. Zhao in subsidiary ownership that were inconsistent with disclosure made by the Company in its public securities filings.” Zhao has agreed to a leave of absence until the investigation is complete.
If you own stock in Puda and would like more information about your shareholder rights, please complete the form below and we will contact you directly. We also welcome you to call us at 800-350-6003.