CitronResearch Reiterates Negative View on Harbin Electric

CitronResearch.com has updated its negative view on Harbin Electric HRBN with additional commentary and research. The full report can be found online via Citron's website. The original alert from Benzinga can be found here. Harbin Electric stock immediately fell after the report was released at that time. As many know, the stories of fraudulent Chinese companies have gone from unread blogs to the front-pages of the business journals worldwide. This publicity has led to the SEC stating that it would increase overall scrutiny of U.S.-based auditors within its inquiry into Chinese companies, especially the ones involved with reverse mergers. The report says, "One thing for sure hasn't changed: Harbin's auditor still is listed as Frazer Frost, a firm which no longer exists. Frazer and Frost have dissolved their partnership; Frazer, who remains as Harbin's auditor, also has RINO and CVVT to its credit, among other notorious stock failures in the China space." Many things have not changed over the last several months. Harbin Electric is still standing their ground as it relates to the supposed bid from the Chairman to take the company private. The report says, "even though there is no formal offer, no committed financing, and the company's reported financial performance has eroded materially in that time, investors are sitting on the edge of their seats waiting for the approval of this gesture by a 'special committee' formed by Harbin." Citron asks, "Why would it take three men a total of eight months to approve an informal offer to take the company private at a significant premium? Heck, the U.S. Congress took less time to bail out the entire banking system and the U.S. automakers!" According to Citron, the company's board consists of members with a worrisome background. Boyd Plowman was sued by the trustee of his former employer, who is now in bankruptcy. Mr. Gatton was a member of the board of directors of Bodisen Biotech. Bodison was one of the first and most notorious of the Chinese frauds. Ching Cheun Chan was also a board member of a U.S. penny stock named Rotoblock, which he just resigned from in February 2011.