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  • Kandi Technologies: Customs Records Contradict U.S. Electric-Vehicle Sales Claims [View article]
    We deny that categorically. We contacted the company's U.S. law firm to ask for comment on the discrepancies we noted. They called us back and declined to answer any questions. End of story.
    Apr 25 03:04 PM | 2 Likes Like |Link to Comment
  • Kandi Technologies: Customs Records Contradict U.S. Electric-Vehicle Sales Claims [View article]
    It is Sharesleuth's policy not to engage in public debate on the content of its stories. However, we would like to reiterate the disclaimer that appeared several times in connection with the latest story -- no one at Sharesleuth, or associated with Sharesleuth, has a short position in Kandi's shares.
    Apr 24 08:17 AM | 2 Likes Like |Link to Comment
  • Phantom Shareholders At Kandi Technologies And Disclosure Issues At Guanwei - Part II [View article]
    Although it is Sharesleuth's policy not to engage in public debate over the contents of our stories, I want to reaffirm that Sharesleuth twice sent questions, via email, to Arthur Porcari at the contact address he has listed numerous times on SeekingAlpha.com and other forums.

    Below are copies of those emails, which were sent on Nov. 30 and Dec. 20.

    From: Christopher Carey [chris@sharesleuth.com]
    Sent: Friday, November 30, 2012 5:06 PM
    To: 'art@corstratinc.com'
    Subject: Important questions from a journalist regarding Kandi Technologies

    Hello Mr. Porcari,

    I am editor of Sharesleuth.com, an investigative reporting site that has been looking into Kandi Technologies Corp. and other Chinese companies that gained U.S. market listings through reverse mergers engineered by a common group of players.

    Below are some questions we would like you to answer regarding your involvement with Kandi, your involvement with some of the people behind the reverse mergers ( including Michael Fearnow and Paul Kelley) and your involvement with certain other publicly traded companies.

    We understand that we are raising some serious issues, and we want to give you every opportunity to respond. However, we also must publish our findings in a timely manner. Thus, we would like to hear back from you by the close of the business day on Monday.

    Please feel free to contact me if you have any questions or require any clarification.

    Sincerely,

    Chris Carey
    Editor
    Sharesleuth.com


    1. What was your role, if any, in the reverse-merger transaction that created Kandi?
    2. How did you acquire your initial shares in that company?
    3. Although you have been one of Kandi’s most vocal and tireless
    supporters, you have said that you have never been compensated by the company. Has anyone else compensated you for your efforts, whether in cash, shares or other consideration? If so, who?
    4. You have mentioned on message-board postings that you invested in Telestone Technologies Corp. and New Oriental Energy & Chemical Corp. at the time those companies went public through reverse mergers. Did you buy your shares in those companies on the open market, or in private transactions from people who got shares through the shell companies used in the deals?
    5. You also mentioned in postings that the same group that brought Kandi public also brought Telestone, New Oriental Energy and Orsus Xelent Technologies Inc. public. Who were the people you were referring to? We know your former brokerage partner Michael Fearnow was involved in the Kandi and Telestone deals, but what about New Oriental and Orsus Xelent?
    6. Do you know Paul Kelley and Jay Chiang, two other people that we have linked to those reverse mergers? If so, how would you describe your interaction with them?
    7. You said in a message board posting a few weeks after Kandi went public that 4 million shares in the public float went into “sophisticated Chinese hands.’’ How did you come to know this, and how did you understand these shares to have been acquired by those holders?
    8. You made that comment in response to a post from another person -- who uses the screen name Rigatoni -- that Kandi’s investor relations representative said that there were 5.9 million shares in the public float, and that approximately 4 million were in friendly hands. SEC filings show that 8 million shares of Kandi went to the shareholders of Stone Mountain Corp., and the details in those filings suggest that all 8 million of those shares should have become part of the public float. Can you explain why Kandi’s investor relations representative would have used a significantly lower number? Where would the other 2.1 million shares
    have gone?
    9. You said in a message board posting in November 2009 that you had spoken to the marketing director of Solus Corp., which was then Kandi’s U.S. distributor, who told you that the company had received orders for 3,500 Cocos with 50 percent downpayments. Did you believe that information to be accurate when you posted it? Do you still believe it to be accurate? Why would that person have shared that proprietary information with you, especially if you were not an official representative of the company?
    10. After Sharesleuth published a story last year questioning whether Kandi had really sold as many electric vehicles as it claimed, you and the company suggested that our reporting was inaccurate. Yet, as we noted in another story several months ago, Kandi’s most recent 10-K filing disclosed that well over half of the mini cars that it sold in 2010 were actually gasoline-powered rather than electric. What would you like to say about that?
    11. Kandi’s earnings release for the second quarter of 2010 clearly
    referred to the 1,000-plus mini cars the company reported selling in that period as “all electric.’’ Based on the company’s total sales figures for 2010, it is apparent that most of the vehicles sold in the first half of the year were in fact the gasoline-powered ones. What would you like to say about that?
    12. After we questioned Kandi’s sales figures, the company reiterated in a letter to shareholders that its revenue figures were accurate, and that it had been paid for all of the vehicles it reported selling. But it added that it did not know where the mini cars ended up, because it sold all of them to third-party distributors. You raised the same argument in your defense of the company. Yet during in the period in question, Kandi had one main market – the United States – and two official distributors (Solus and Kandi USA, headed by the son of Kandi’s CEO). Why would Kandi not have been in close, regular contact with them about what geographic areas were registering the most sales, what styles and features were most popular with buyers, and what it might to do further
    penetrate the market? Put another way, what sort of company does not know who its customers are?
    13. We noted that one of the shareholders of Stone Mountain prior to the reverse merger was a man named Logan Anderson. He was
    previously the president of Green Fusion Corp., another shell that
    became House of Brussels Chocolates Inc. You became a consultant to House of Brussels and also were among its biggest shareholders. What was your role, if any, in the reverse merger transaction that created House of Brussels?
    14. We also noted that Roger Lockhart, who has been an investor in some of the Chinese reverse merger companies, was one of the biggest investors in House of Brussels. How did he get involved in the company? Did you bring him into the deal, or vice versa?
    15. We noted that before Kandi became a public company, you were an active poster on stock message boards related to a company called Host America Corp. Roger Lockhart was among its biggest shareholders, and sold millions of dollars of stock after the company put out a false press release regarding a purported contract with Wal-Mart. How did you get involved with Host America? Was it through Roger Lockhart or someone else? Were you compensated by the company or anyone else for your
    efforts on behalf of Host America?
    16. You mentioned in a recent message board post that you went to China last year with Roger Lockhart to visit Kandi’s facilities. What is his relationship with Kandi? Do I remember correctly that you said he paid for your trip?
    17. You mentioned in another recent post that certain people you
    brought to the presentation by Kandi’s chief executive in Atlanta in
    September represented 4 million of the company’s outstanding shares. Is that figure correct? How and when did those people acquire those shares, and what was your role in that? Did they all acquire them on the open market? Were any among the investors who got shares in the reverse merger?
    18. What else is important to mention about your involvement with
    Kandi? What else would you like to say about the issues that we have raised?


    From: Christopher Carey [chris@sharesleuth.com]
    Sent: Thursday, December 20, 2012 12:26 PM
    To: 'art@corstratinc.com'
    Subject: Following up Re: important questions from a journalist about Kandi Technologies

    Attachments: Chiang Fearnow email.doc

    Hello Mr. Porcari,

    I have not received any responses to the questions that I sent you in late November regarding your involvement with Kandi Technologies.

    We have waited to publish our stories in hopes of hearing from you and several other people we contacted. But if we do not hear back before the close of business tomorrow, we will have to proceed.

    I also wanted to ask you to explain one more thing – a copy of an email we turned up in our reporting. It is a message sent from a man named Jay Chiang, who has been found by a Canadian court to be at least a 50 percent owner of Winner International Group, which played a key, undisclosed role in the merger that created Kandi and three other Chinese reverse merger companies – Orsus Xelent, New Oriental Energy & Chemical and Telestone.

    The recipient is Michael Fearnow, your former partner in Porcari, Fearnow & Associates. In the message, Chiang asks Fearnow to have “Art ‘’ – presumably you – take a look at Kandi’s web site.

    In the same email, Chiang says that he will have Paul Kelley, another key player in the reverse-merger network, contact Fearnow about structure and pricing issues.

    I’ve attached a copy of the email to this message. The header shows that it was sent in March 2007, more than three months before the reverse merger. That suggests to us that you were involved with Kandi long before the reverse merger, and in fact were working with the group that put the deal together.

    I don’t believe you have ever disclosed those activities in your message board postings. Also, it would appear that Michael Fearnow, who is not a broker-dealer, was involved in the structuring or pricing of the merger transaction, the very thing that led to the Securities and Exchange Commission charges
    against him in 2000. Would you care to explain this email?

    Again, we need to hear from you by the close of business tomorrow.

    Best regards,

    Chris Carey
    Editor
    Sharesleuth.com
    Jan 4 04:48 PM | 1 Like Like |Link to Comment
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