The self-proclaimed “leading manufacturer of nano-precipitated calcium carbonate in China”, ShengdaTech, Inc. (PINK:SDTH), filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Reno on Friday.
After being delisted from the NASDAQ and being denied the request for continued listing, SDTH was traded on the OTC. A nearly 90% crash had SDTH trading for under a dollar and the stock closed down 6.35% down at $0.59 on Friday.[BANNER]
The news wasn’t widely known before the markets closed, so the effect of it will probably hit full force today. Before its problems began, SDTH was reporting huge revenues and profit growth. Even in the documents filed for bankruptcy, the company reports $295.4 million in assets and $180.9 million in liabilities as of September 30, 2011.
KPMG, the auditor for SDTH at the time, found some serious discrepancies in the company’s and its subsidiaries’ financial records. This led to the inability to file the annual report on time and the eventual delisting of SDTH.
This may turn out to be the next in row of the big hits for Chinese companies traded on the U.S. stock markets. This may still be an interesting story to follow, and we will try to update you as it unfolds.
