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What's wrong with CHBT? -- China-biotics, a resource page

|Includes:China-Biotics, Inc. (CHBT)
China-biotics, CHBT: genuine or fraud?

I
 am short CHBT -- and here's why


RECENT

http://www.bdowatch.com/ challenges BDO International and BDO Limited with long list of problems


CHBT is over, March 18, 2011 - ursamajor5813
http://seekingalpha.com/instablog/775517-ursamajor5813/150135-chbt-is-over

China MediaExpress: Stocks to Watch in the Wake of This Scandal, March 15, 2011, Ian Bezek
http://seekingalpha.com/article/258245-china-mediaexpress-stocks-to-watch-in-the-wake-of-this-scandal?source=qp_article

China Biotics: The Numbers Don't Add Up, March 15, 2011, China Economic Review)

http://seekingalpha.com/article/258364-china-biotics-the-numbers-don-t-add-up?source=qp_article


 The Missing Outlets -- It's so simple a child could understand it
The company claimed 103 outlets last summer. That number was challenged by CitronResearch, alleging that most were fictional.  The company provided addresses of the outlets. Investigators took photos of the locations of those addresses, proving they were not CHBT outlets. The company changed the wording of its release, saying that these were just locations where product could be found (and much of that wasn't even true).  As of today we still do not have a full list of addresses for the dedicated outlets claimed in SEC documents. Instead, CHBT claimed to close 95 outlets in three months, conveniently eliminating the need for providing a list.

Addresses
 and photos

http://www.therealchbt.com/index.php?option=com_stores&view=list&Itemid=8
www.therealchbt.com/

Original Citron Posts
http://www.citronresearch.com/index.php/2010/08/30/it-doesnt-take-a-microscope-to-see-whats-wrong-with-china-biotics-nasdaqchbt/
http://www.citronresearch.com/index.php/2010/08/31/china-biotics-nasdaqchbt/
http://www.citronresearch.com/index.php/2010/09/14/china-biotics-chbt-is-a-fraud-%E2%80%93-now-sue-citron-we-dare-you/#more-434
http://www.citronresearch.com/index.php/2011/01/26/china-biotics-nasdaqchbt-what-really-happened-last-week/

Chinese Company Analyst's Updates on Investigator's
http://seekingalpha.com/instablog/659080-chinese-company-analyst/92765-china-biotics-an-investigation-of-its-alleged-store-base

http://seekingalpha.com/instablog/659080-chinese-company-analyst/90918-chbt-store-verification-results-start-rolling-in

My blogs/articles on the missing outlets
http://seekingalpha.com/article/251960-china-biotics-record-earnings-don-t-negate-five-unresolved-issues?source=qp_article

http://seekingalpha.com/article/244256-china-biotics-strategy-or-cover-up
http://seekingalpha.com/instablog/582827-matt-berry/129274-china-biotics-testimony-forensics-and-the-case-of-the-missing-retail-outlets


The Chinese Financial filings do not Match the SEC filings -- and the numbersare not even close
http://seekingalpha.com/article/223068-china-biotics-vs-spreadtrum-communications-why-aic-filings-matter


Should
 the SAIC and SEC Documents roughly match?

Waldo Mushman
www.waldomushman.com/SAIC.html
from the article, "Texas Short Seller Fights China Fraud in $20 Billion U.S. Shares"  ~ noir.bloomberg.com/apps/news?pid=newsarc...
"... as Roth Capital’s due diligence procedures “evolve,” it checks SAIC filings now too." ~ Ibid. 
 
"Short-Seller Cuts Through China Red Tape" ~ TheStreet, www.thestreet.com/story/10952964/short-s...
 "The notion that SAIC filings are largely meaningless finds little support among someexperts. The Shanghai-born-and-raised Gerry Wang, CEO of a containership companyin Vancouver, says his extensive network of friends and colleagues in China view accuracy in SAIC filings as an imperative." ~ Ibid.
 "And Peter Humphrey, a forensic accountant and corporate due diligence investigatorin China, puts it bluntly: "The apologists for the fraudsters in the U.S. like to down play the importance of SAIC filings because doing so serves their purposes." ~ Ibid.

SAIC home
 
SAIC Instructions for Annual Examination
202.108.90.68/ae/ae_1.html
 
 
Interest Earned is too small for Cash Claimed
"China Biotics claims its cash in the bank is $159.7 million in the bank, according to itsJune 30 SEC filing – every dollar of which is supposedly available for corporatepurposes.  Yet it reports interest of just $87,876. So where is the interest? . How canthe company be earning interest of less than 1/10th of comparable companies?  Companies with large cash balances earn interest.  Interest rates on free cashbalances in China earn 1% for 3 month to 1 year term deposits, and 2% for 1 to 2year term deposits."
 
 
Chinese Investigative Reporter finds few outlets, low distribution, and no large bulk customers
 
English Translation
 
List of Chinese News Organizations carrying the Article (with Google Translator)
 
One edition of the Original Article, China Daily (with Google Translator)
 

Zheng Zhaohui (AKA, Xia Cao/Summer Grass) Widely Followed ChineseForensic Accountant doubts CHBT's cash and tax claims
"Overall, the author believes CHBT is involved in fabricating its five years of reported profits, causing massive tax liabilities, and also massively inflated cash balances as a result."
 
English Translation
 
Reporting on Xia Cao by Chimin Sang
seekingalpha.com/article/248719-reasons-...;
 
Original blog (google translation)
  
Xia Cao's books on Amazon.com
 
  
Auditor for SEC filings: BDO limited
"BDO McCabe Lo Limited, the BDO Member Firm in Hong Kong, has announced itssuccessful conclusion of an agreement to merge the firm, Shu Lun Pan Horwath HongKong CPA Limited into the existing firm, with effect from 1 May 2009. The merged firmwill change its name to BDO Limited."
 
Today CHBT claims some 158 million cash. 
 
They are audited by the same group who audited CXTI.
 
CXTI claimed 21 million dollars cash 1st q 2007.
 
You can see here their final sec correspondence:

They
 trade for a penny nowhttp://finance.yahoo.com/q?s=CXTI.PK

"SEC suspends trading in China Expert Technology"
http://www.reuters.com/article/2007/10/01/sec-chinaexperttechnology-idUSN0130735920071001

For moresee Chinese Company Analyst's "Not all bdos are the same"
http://seekingalpha.com/article/213213-orient-paper-not-all-bdos-are-the-same


CHINA RTO Auditors in the News


"SEC probes Chinese Reverse Mergers and their US Auditors"
http://www.businessweek.com/news/2010-12-21/sec-probes-chinese-reverse-mergers-and-their-u-s-auditors.html

"China Marine Food GroupAuditor's Role in Another Alleged Fraud"
seekingalpha.com/article/210294-china-ma...

"CMFO’s Auditor’s Role in Another Alleged Fraud"

http://chinesecompanyanalyst.com/2010/06/15/cmfo%E2%80%99s-auditor%E2%80%99s-role-in-another-alleged-fraud/

"SEC Fines Audit Firm, Bars Partner Over China Energy "Fraud" 
http://www.bloomberg.com/news/2010-12-21/sec-fines-audit-firm-bars-partner-over-china-energy-fraud.html

"....all of the reverse merger companies seem to hire the same auditors that certified the financials of companies that sank into the deepest depths ..."
 
"Last month, I wrote in RealMoney that there were many small U.S. auditorsoperating in China that are basically a joke. They are not performing audits in themanner an average person would expect them to be done. In many cases -- not justa few -- I believe that these audit firms are simply signing off on numbers given tothem by management to bank their auditing fees (which can be up to $300,000 forone year from one client) and in the hopes of winning new clients from thatcompany's pre-IPO investors." 
www.thestreet.com/story/10952867/1/secs-...
 
Roth Capital
Roth goes to Investor's Day on September 202010.
Roth downgrades to sell the next day.

“Wall Street Journal - Sep 21, 2010 Roth Capital cut its stock
investment rating onChinaBiotics IncCHBT $9.83$0.69 6.55% manufacturer of biotechnology products and supplements to sell from buy ...”
tinyurl.com/2awsxw7 (read text)

Links here
tinyurl.com/2ahulcj ;
and here
tinyurl.com/2az3zvt


China-biotics belongs to the "China RTOcategoryNews

"Beware This Chinese Export"
online.barrons.com/article/SB50001424052...

Shanghai Numbersseries of Articles on the China RTO situation
http://www.thestreet.com/stock-market-news/10922214/the-shanghai-numbers/the-shanghai-numbers.html


SEC's New Focus
"Chinese companies trading in U.S. face increased scrutiny by SEC, Congress, and private plaintiffs"
http://www.lexology.com/library/detail.aspx?g=073b6026-fb05-45f5-ba1b-b506ec668c83


"Congress and SEC Hit Stocks Made in China"
http://online.wsj.com/article/SB10001424052748704610904576032091919244966.html?mod=WSJ_hp_LEFTWhatsNewsCollection
SEC Probes China Stock Fraud Network
http://www.thestreet.com/story/10952277/1/sec-probes-china-stock-fraud-network.html


CHBT filings with the SEC

sec.gov/cgi-bin/browse-edgar?company...


(If you have references that you think would be valuable to others who are investigating CHBT, please post them in the comments section.)
Stocks: CHBT