Reported World Journal January 9', China Energy Savings Technology and four Chinese were charged for fraud. In a press release of the U.S. Securities and Exchange Commission, SEC filed an emergency action December 4, 2006 against China Energy Savings Technology, Inc., several of its former officers, its controlling shareholder, and others, alleging that they orchestrated an elaborate stock manipulation scheme.
The Commission alleges that China Energy and the company's undisclosed control person, Chiu Wing Chiu, with the assistance of the company's Corporate Secretary, Lai Fun ("Stella") Sim, devised a wide-ranging stock manipulation scheme to fraudulently obtain Nasdaq National Market System (NMS) listing, artificially inflate China Energy's stock price, and sell millions of China Energy shares into the U.S. capital markets.
According to the Commission's complaint, other participants in the scheme included the company's former purported Chairman and CEO, Sun Li; a former company employee, Zhao Jun Tang (J. Zhao); and New Solomon Consultants, which was China Energy's majority shareholder. All the defendants reside or have operations abroad.
The federal district court for the Eastern District of New York issued an order freezing assets that covers $3.9 million held in four brokerage accounts in the names of relief defendants Precise Power Holdings Limited, Essence City Limited, Amicorp Development Limited, and Yan Hong Zhao.
According to the Commission's complaint, China Energy, Chiu, and others engaged in illegal unregistered sales by gifting shares to more than 400 persons as part of the Nasdaq listing scheme and by improperly issuing S-8 stock to promoters engaged in capital raising activities and consultants who performed no services.
The Commission's complaint charges China Energy, Chiu, Sim, J. Zhao, Li, and New Solomon with violating the antifraud provisions of the federal securities laws and China Energy, Chiu, Sim and J. Zhao with violating the registration provisions of the securities laws. It seeks permanent injunctions prohibiting future violations of the securities laws, disgorgement, and civil penalties. With respect to Chiu, Sim, J. Zhao, and Li, the Commission also seeks officer and director bars and penny stock bars.