Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University
U.S. securities regulators on Thursday charged the former chief executive of China-based ChinaCast Education Corp with stealing tens of millions of dollars from investors in a U.S. public offering. Ex-CEO Chan Tze Ngon transferred $41 million to a subsidiary that then transferred funds outside of the company, the U.S. Securities and Exchange Commission said.
The SEC also charged the company’s former president of China operations, Jiang Xiangyuan, with insider trading. Xiangyuan allegedly avoided more than $200,000 in losses by unlawfully selling some 50,000 shares after transferring some of the company’s assets.
The company, which once had a market capitalization of more than $200 million, entered the U.S. capital markets through a so-called reverse-merger in 2006. Nasdaq delisted ChinaCast after it failed to file an annual report for 2011.
Lawyers for the two defendants could not be immediately reached for comment.
“Chan orchestrated the systematic looting of ChinaCast and hid his misconduct by repeatedly lying to investors about the company’s assets,” said Sanjay Wadhwa, senior associate director for enforcement in the SEC’s New York office.