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Yuhe International (YUII): In for the Bounce

|Includes: Yuhe International, Inc. (YUII)

Yuhe International (YUII)  plunged after Geo Investing, a Seeking Alpha columnist & well know short-seller, said that the company may have lied about purchasing 13 breeder farms in 2009. Geo Investing alleges that the $12.1M that the company supposedly used as a deposit for the farms may have been misappropriated & Yuhe has “internal control weaknesses” and “possible rubber stamp audits.” Yuhe stock tumbled $2.08 or 50.98%

Yuhe responded with the following statements:

Yuhe International, Inc. Provides Incremental Acquisition-Related Documentation

The Company hereof attaches the following Chinese documents as an evidence of the take-over progress:

(1) The Notice Letter of staff appointment for the acquired breeder farms

(2) The renovation contract for one of the acquired breeder farms with associated pay check stub

The Company will continue to disclose the renovation contracts relating to the acquired breeder farms in 24 hours via Yuhe’s below website, in addition to the documents disclosed in its press release dated June 14, 2010:

Mr. Zhentao Gao, Chairman and Chief Executive Officer of Yuhe International, commented,

“The renovation contracts and employee appointment updates are solid evidence of our take-over progress of the acquisition we entered into with Weifang Dajiang Corporation in December 2009. Yuhe generally conducts a two to three-month facility restoration and employee training program to facilitate a smooth transition on the acquired breeder farms, after all existing breeding stocks are retired from the acquired breeder farms. We will continue to disclose incremental documentation, if necessary, to validate our business and to provide greater transparency in our operations for our shareholders.”

Farm Manager Appointment Notice (re. acquired breeder farms):

Renovation Contract and pay check stub (re. Anqiu Breeder farm):