It has been a busy few weeks for controversial Chinese reverse merger AutoChina (AUTC), previously examined here. Of course, the annual report for 2010 is still nowhere to be found.
In a letter to shareholders, dated the 26th of September, AutoChina has revealed that PWC is no longer their auditor. AUTC‘s CEO gave the rather lame excuse that they could not “come to an agreement on the timing of the completion of the audit.” To translate from Scamtonese, “PWC is suddenly actually checking things, and that takes a very long time, these new guys we hired will be less thorough and fast.” Read the whole letter here.
On the 29th of September, the company issued a press release about a long-running dispute with the SEC, over AUTC‘s bizarre accounting:
AutoChina International Limited (“AutoChina” or the “Company”) (NASDAQ: AUTC), China’s largest commercial vehicle sales, servicing, leasing, and support network, today announced that it has concluded its appeal with the Office of the Chief Accountant (“OCA”) of the U.S. Securities and Exchange Commission (“SEC”) regarding the accounting treatment for the Earn-out Share Provision (“Earn-out”). The Company also announced that it has entered into an agreement to cancel the Earn-out for the year ending December 31, 2011.
Again, translated from Scamtonese, AUTC lost the appeal and is ending the bizarre earn-out, which funnelled gobs of free shares to CEO Li Yong Hui. Each year AUTC public shareholders were forcibly diluted by anywhere from 5% and 20%, in addition to all of the other compensation being sucked out of the company by AUTC management.
Yesterday, on the 3rd of October, more awesome news for long suffering AUTC stuckholders:
AutoChina International Limited (“AutoChina” or the “Company”) (NASDAQ: AUTC), China’s largest commercial vehicle sales, servicing, leasing, and support network, today announced the scheduling of its oral appeal hearing with the Listing Qualifications Department of The NASDAQ Stock Market LLC (“Nasdaq”), which previously notified the Company of its determination that the Company’s common stock would be delisted from Nasdaq. The hearing has been scheduled for November 10, 2011. AutoChina also announced that its request for an extension of the stay of the suspension of its shares from trading on Nasdaq has been denied, and therefore beginning with the opening of the stock market on October 4, 2011, the Company’s shares will be suspended from trading on Nasdaq and are expected to trade on the OTC pink sheets market.
AUTC‘s unaudited balance sheet, is quite interesting. The company claims to have 198mm in debt and 391mm in cash. One can only wonder how much of the debt is real, and how much of the cash? And can any investor hope to recover even a penny?