US securities regulators on Wednesday set fines against two Chinese executives accused of looting formerly US-listed Puda Coal at more than $250 million:
The Securities and Exchange Commission set the default judgement against Puda Chairman Zhao Ming and former chief executive Zhu Liping. The agency said the pair stripped the firm of its main asset before Puda raised $116 million in two US public offerings in 2010.
While investors soaked up the offerings based on the potential of Puda’s ostensibly 90 percent-owned, profit-generating mining subsidiary Shanxi Coal, Zhao had already secretly transferred Shanxi’s shares to himself a year earlier. Zhao had then handed 49 percent of Shanxi Coal over to Citic Trust, a unit of the giant Chinese investment bank Citic, in exchange for 1.2 billion preferred shares in a new coal investment fund.
Zhao also pledged 51 per cent of Shanxi’s assets to Citic for a $370 million loan.
The fines were issued as a default judgement, which usually comes when accused parties don’t defend themselves against charges.
Published in The Express Tribune, July 26th, 2015.
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