Revealing the Shoddy Practices of China Sky One Medical

Cabeza Howe profile picture
Cabeza Howe

In a previous post I raised questions about China Sky One Medical Inc. (Nasdaq GM: CSKI), including an unusual insider stock transaction, past accounting irregularity, use of dubious auditors, frequent changes of auditors, and the appointment of a non-financial graduate student as a director and “audit committee financial expert.”

Here I’m trying to unveil China Sky One’s despicable, fraudulent business practices with hard facts. (Note: some of the links provided below can be slow or not functioning occasionally. If that occurs to you, just try again at a later time. In some cases, I provided double links. Note also that many of the links given here had their origin in government or quasi-government websites.)

A “Flagship Product” that Rips Off Consumers

Weight-loss products account for 24.3% of CSKI’s total revenue in the first nine months of 2008. And most of the weight-loss revenue came from company’s flagship product: Sumei Slim Patch.

CSKI’s operating company Harbin TDR (short for Harbin Tian Di Ren) promotes Sumei Slim Patch as an effortless, fast-track “Sleep & Slim” weight-loss panacea. The Sleep & Slim patch (“Shui-shui Shou” or 睡睡瘦速美减肥) was widely promoted in TV Shopping channels throughout China.

These programs advertised the “Sleep & Slim” patch as a product that enables the consumer to “paste, sleep and slim”, “paste at night and slim in the morning”, “reduce waist size by more than 1 Chun (3.33 centimeter, or 1.3 inch) by next morning”, “lose 1 Jin (0.5 kg or 17.6 oz) by next morning”, and so on, and so forth.

Consumers who bought into this type of ads have found the product to be totally ineffective and cause a lot of side effects (allergy, inflammation, swelling, ulcer, etc.) Complaint about this product was widespread.

All...TV “Sleep & Slim” promotions worked the same way: promise of overnight weight loss, false money-back guarantees, and

This article was written by

Cabeza Howe profile picture
Cabeza Howe trades (and invests in) stocks for a living. He mainly invests in companies that (1) generate a lot of cash, (2) can grow for the long run, and (3) trades at reasonable valuation. He also occasionally shorts businesses on decline or over-hyped companies that have no hope of achieving profitability.

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