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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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Wed, 03/16/2011 - 12:56 | Link to Comment pazmaker
pazmaker's picture

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

Wed, 03/16/2011 - 14:01 | Link to Comment oh_bama
oh_bama's picture

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

Many thanks!

 

And good luck with BTFDing!!

Wed, 03/16/2011 - 12:52 | Link to Comment buzzsaw99
buzzsaw99's picture

The Chinese learn fast. Good for them.

Wed, 03/16/2011 - 12:57 | Link to Comment 66Sexy
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.

Wed, 03/16/2011 - 13:07 | Link to Comment A Man without Q...
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.



Wed, 03/16/2011 - 12:54 | Link to Comment Cognitive Dissonance
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.

Bravo!

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

Wed, 03/16/2011 - 13:18 | Link to Comment Caviar Emptor
Caviar Emptor's picture

+1

Wed, 03/16/2011 - 13:31 | Link to Comment Mr Lennon Hendrix
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.

Donate:

http://www.zerohedge.com/content/donate-zero-hedge

Wed, 03/16/2011 - 12:57 | Link to Comment defn8Dog
defn8Dog's picture

Go long Herb Greenberg?

Wed, 03/16/2011 - 12:58 | Link to Comment Ayn Rand
Ayn Rand's picture

This cannot possibly come as a surprise to readers here.

Wed, 03/16/2011 - 12:58 | Link to Comment Popo
Popo's picture

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

 

 

Wed, 03/16/2011 - 13:03 | Link to Comment cougar_w
cougar_w's picture

Down 8%. I shoulda went short this POS.

Wed, 03/16/2011 - 13:37 | Link to Comment CPL
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.

Wed, 03/16/2011 - 13:05 | Link to Comment JR
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."

http://www.marketoracle.co.uk/Article26923.html

 

Wed, 03/16/2011 - 13:08 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

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

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

Nooooooooooooooooooooooooooooooooooooooooooooo really.

Wed, 03/16/2011 - 13:33 | Link to Comment Mr Lennon Hendrix
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?

Wed, 03/16/2011 - 13:10 | Link to Comment Misean
Misean's picture

Should change that to C-MEH.

Wed, 03/16/2011 - 13:20 | Link to Comment tallen
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.

Wed, 03/16/2011 - 13:42 | Link to Comment earlthepearl
earlthepearl's picture

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

Wed, 03/16/2011 - 13:44 | Link to Comment tallen
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.

Wed, 03/16/2011 - 13:20 | Link to Comment Caviar Emptor
Caviar Emptor's picture

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

Wed, 03/16/2011 - 13:24 | Link to Comment tallen
tallen's picture

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

Wed, 03/16/2011 - 13:20 | Link to Comment Monoki
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

Wed, 03/16/2011 - 13:27 | Link to Comment defn8Dog
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.

Wed, 03/16/2011 - 13:30 | Link to Comment tallen
tallen's picture

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

 

Love you Tyler

Wed, 03/16/2011 - 13:29 | Link to Comment fenner
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.

Wed, 03/16/2011 - 13:30 | Link to Comment What_Me_Worry
What_Me_Worry's picture

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

Wed, 03/16/2011 - 13:39 | Link to Comment Franken_Stein
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.

 

http://www.youtube.com/watch?v=SR7q9_8qmak

 

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 !!!

 

Wed, 03/16/2011 - 13:42 | Link to Comment John McCloy
John McCloy's picture

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

Wed, 03/16/2011 - 13:47 | Link to Comment trav7777
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

Wed, 03/16/2011 - 13:49 | Link to Comment iinthesky
iinthesky's picture

Went off a cliff i saw lows of -38%

Wed, 03/16/2011 - 13:51 | Link to Comment medicalstudent
medicalstudent's picture

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

 

<1.00

 

the language of tracked quantities...

Wed, 03/16/2011 - 14:03 | Link to Comment earlthepearl
earlthepearl's picture

why are people buying at this level?

Last ten minutes it has stabilized

Wed, 03/16/2011 - 14:08 | Link to Comment tallen
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!

Wed, 03/16/2011 - 14:18 | Link to Comment earlthepearl
earlthepearl's picture

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

comes out tomorrow.

 

Dude the 10K is fucking fiction

Wed, 03/16/2011 - 14:21 | Link to Comment earlthepearl
earlthepearl's picture

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

Wed, 03/16/2011 - 14:33 | Link to Comment iinthesky
iinthesky's picture

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

Wed, 03/16/2011 - 14:40 | Link to Comment iinthesky
iinthesky's picture

ZH needs an android alert app

Wed, 03/16/2011 - 14:46 | Link to Comment squexx
squexx's picture

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

Wed, 03/16/2011 - 15:45 | Link to Comment UnknownQuantity
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. 

Wed, 03/16/2011 - 16:10 | Link to Comment earlthepearl
earlthepearl's picture

Went to 5.50 in after hours

Wed, 03/16/2011 - 16:16 | Link to Comment Jrsurf00
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

Wed, 03/16/2011 - 16:31 | Link to Comment tallen
tallen's picture

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

Thu, 03/17/2011 - 07:34 | Link to Comment AGORACOM
AGORACOM's picture

"Sinclair Upton Research" has no Google history until this report http://y.ahoo.it/iKJzESSR 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.

George

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