"DEER" In Headlights: Latest Alleged Chinese Reverse-Merger Fraud
As we expected in November after disclosures about the first several Chinese fraud companies first hit, a veritable "cottage industry" has developed in exposing Chinese companies that may (or may not) be full out corporate frauds. The list of companies to see their prices plunge on such comparable reports since then is too long to count, and we are confident that many more Chinese reverse-merger and other NYSE and Nasdaq promptly listed companies will continue rising to the surface. The latest potential casualty: Deer Consumer Products (Nasdaq: DEER), which according to investor Alfred Little, "conspired to defraud investors by exaggerating it revenue, profit margins, and income on its Chinese domestic sales of its low-end kitchen appliance products. Furthermore, DEER management misappropriated $11 million in company funds through a questionable recent land purchase and also failed to disclose direct competition and other serious conflicts of interest arising from certain unconsolidated related parties." While we have not confirmed any of the allegations in the report, we present it for informational purposes to those investors who may have rushed somewhat imprudently to buy the stock.
Full report below.