China Integrated Energy (CBEH): The Latest Alleged Chinese Fraud (With A True Value Of $0.76/Share)

Tyler Durden's picture

Another day, another alleged Chinese fraud emerges. Considering the track record of the Zero Hedge predicted cottage industry at exposing frauds such as RINO, CCME and CAGC, all of which are likely now halted in perpetuity, (much to the chagrin of their corrupt, idiot sellside analysts) here is the latest candidate for very careful diligence: China Integrated Energy (NASDAQ:CBEH), previously mentioned here when we discussed the clients of potentially compromised auditor Sherb. From the Sinclair Upton Research thesis: "In this report, we present irrefutable evidence that China Integrated Energy (NASDAQ: CBEH) is 1) transferring company funds to management insiders through fraudulent sham acquisitions and 2) fabricating its SEC financial statements. CBEH has transferred at least $35 million dollars of company cash by making acquisitions of shell companies owned by Gao Bo, who is the firstborn son of the CBEH’s CEO, Gao Xincheng. Given that the company has made over $134 million dollars in acquisitions and lease “prepayments”, our research has uncovered only a small fraction of the total amount being stolen from shareholders. There is also strong evidence that the financial results of all three segments of the company, refined products distribution, biodiesel, and gas stations, are overstated or even fictitious. The true value of CBEH is likely to be no more than $0.76/share, equal to the $37 million raised in recent secondary offerings, if the cash has not already been funneled out to related parties under the guise of even more acquisitions, gas station leases, and capital expenditures."

To the longs who jumped in like all good momos without doing due diligence: good luck. We urge you to read the below report.


From Sinclair Upton Research

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pazmaker's picture

NASDAQ has also halted trading on SDTH   ShendaTech out of Shanghai.  They have been cooking the books and auditors found it. 

oh_bama's picture

Is there an ETF focusing on china small cap stock trading in US?

Many thanks!


And good luck with BTFDing!!

buzzsaw99's picture

The Chinese learn fast. Good for them.

66Sexy's picture

Whole new levels of corruption. Chinese learn the shell games from the wall street masters. The equivalent of the shoeshine boy giving stock tips.


Financial exploitation is the harbinger of economic destruction.

fun fun fun.

Cant imagine anyone being dumb enough to buy mid/small cap stocks from china.

A Man without Qualities's picture

"Cant imagine anyone being dumb enough to buy mid/small cap stocks from china."

I would imagine the majority of buyers are fund managers in fancy names such as China Small Cap Super Growth Fund, who just do a word search for China and buy a piece.  They won't lose too much sleep over it, after all it's not their money.  No doubt they worked US tech stock funds 10 years ago and then shuffled off to find the next bubble to exploit.  They'll just move onto renewables, or something that becomes the next hot sector.

Cognitive Dissonance's picture

I've got to hand it to you Tyler. Despite the insanity out of Japan and in all the markets you still relentlessly pound away at the Ponzi wherever it's found.


And to think you're just a one armed (wall, not fiat) paper hanger.

Mr Lennon Hendrix's picture

Time for Tyler to go back to reporting financal news (I know he didn't stop) now that he has broken the nuclear meltdown better than any other news source.  Don't forget, he works hard for the monie.  Donate what you can, or buy some sweet ass gear from WilliamBonzai7.


defn8Dog's picture

Go long Herb Greenberg?

Ayn Rand's picture

This cannot possibly come as a surprise to readers here.

Popo's picture

Markets are not permitted to decline.  It would set off the derivatives bomb. 



cougar_w's picture

Down 8%. I shoulda went short this POS.

CPL's picture

It's already down 21%, I can't find any shares to short.  People bag holding this are pounding the sell button as fast as possible.

JR's picture

According to Gordon T. Long’s diamond-rated article on The Market Oracle published yesterday, RIP Shadow Banking System, Long Live QEx, China has been the “recipient of many of the 46,000 factories that left America” - emphasis on the "46,000."


Spalding_Smailes's picture

But, but, but .... Reserve Currency status just around the corner ....

Communism, fraud, reverse engineering, deceit ......

Nooooooooooooooooooooooooooooooooooooooooooooo really.

Mr Lennon Hendrix's picture

Reserve currency status?  Says who, the MSM?  Pshaw.  Gold will be inserted into the basket in an attempt to loophole the economy again.  Of course, both you and I know the Fed starts the dollar ponzi by leasing their gold reserves, but we won't tell no one.  Right?

Misean's picture

Should change that to C-MEH.

tallen's picture

Thanks Zerohedge, just bought some puts. Worked out great last time on CAGC.

Edit: I'm up $300 in 5 minutes. Happy days. Keep up the great work.

earlthepearl's picture

me too, up 1.5K, might just cash out, dont want to be too greedy

tallen's picture

Guess I'm gonna be holding a rave in my uni halls tonight. :D. Down 40%. I'm gonna hold these puts. Doesn't seem like theres any resistance to it. In CAGL they seemed to keep the price up somewhat.

Caviar Emptor's picture

Harvard BS now offering electives in Ponzi engineering. Macro and Micro tracks available.

tallen's picture

Bernie Madoff aught to start doing lectures, I'm sure lots of Chinese businessmen (AKA scam artists) would sign up.

Monoki's picture

Zero Hedge:

This is your best work, and I commend you on it.  No one has highlighted the topic of China equity fraud and brought to floor research from wherever.  On ZH.  This news brought to fore is tradable.  The pattern of Chinese corruption is apparent enough such that major news outlets should also be on it...because it is a story.

Recon Cap

defn8Dog's picture

Some months ago, Barron's did a pretty scathing piece on the ramp up of Chinese reverse mergers.  It was buried on page 50 or something... easy to miss.

tallen's picture

Just broke below $5, down almost 20% today and 10% since zerohedge reported. Keep up the fantastic work.


Love you Tyler

fenner's picture

Not the first and not the last. They go to NASDAQ because it's less regulated and easier to be listed than Shanghai SE and Shenzhen SE.

What_Me_Worry's picture

XING puts all their scams to shame.  Possibly hundreds of millions.

Franken_Stein's picture


That little picture in the paper is taken from the movie: A better tomorrow (1986) by John Wu, starring Chow Yun Fat.


The irony here it is a movie about a gang of dollar counterfeiters in Hong Kong.

Almost like in the Marriner Eccles building.


A-hahahahaha !!!


John McCloy's picture

  When do mutual funds stop purchasing Chinese equities and throwing these 401k's down the tubes?

trav7777's picture

China is littered with fraud companies.  And they have more cancer cases already from industrial pollution than if Fukushima erupts in a supernova

iinthesky's picture

Went off a cliff i saw lows of -38%

medicalstudent's picture

upright shoulder-head-shoulder mid 09 to beginning 11 -- predicts about just that...




the language of tracked quantities...

earlthepearl's picture

why are people buying at this level?

Last ten minutes it has stabilized

tallen's picture

Probably algorithmic/technical traders out there trying to catch a pullback. Shame it's not going to pullback because it's NAV is 0!

earlthepearl's picture

Just reading some tools comments on yahoo, saying wait till the 10k

comes out tomorrow.


Dude the 10K is fucking fiction

earlthepearl's picture

Question, if it does get halted, what happens to holders of options?

iinthesky's picture

Makes me kick myself for pulling all money out of the brokerage account

iinthesky's picture

ZH needs an android alert app

squexx's picture

HHHHMMMM..........An opportunity ot buy the fucking dip?!?!??!?

UnknownQuantity's picture

I' m still looking for info on what to do with puts on this or similar company (CAGI) if/when the company is delisted or NASDAQ puts it on hold for a time (CCME and CAGI last week). What happens to the value of the puts?  Mine (CBEH, CAGI, CCME) are all several months out. Thanks for any help. 

earlthepearl's picture

Went to 5.50 in after hours

Jrsurf00's picture

the 5.5 is surely a snapback from people who put out in cover on the close orders to lock in gains. I appreciate the opportunity to short this guy at higher levels than the price at which this post was presented

tallen's picture

It's due to their 10k being out, with KPMG on the bottom. Have to see what happpens tomorrow

AGORACOM's picture

"Sinclair Upton Research" has no Google history until this report Opportunistic Manipulation of China RM space? 

Trading $5.22 this morning, so outside of of a 60-minute panic, market doesn't seem to think this "report" is authentic.

OTOH, confidence in Chinese stocks must be extremely low for this kind of impact out of obscure report.