On the morning of 28 November 2011, then halted Chinese reverse merger company Advanced Battery Technologies‘ (ABAT) CEO Zhiguo “Full of It” Fu issued a howler of a letter, available here, to his long suffering shareholders stuckholders. Here are some choice bits:
NASDAQ decided that, solely because we are Chinese, we should be required to provide an extraordinary level of confirmation from our banks. Despite the lack of any evidence of wrong-doing on our part, NASDAQ insisted that we approach our banks, inform them that our U.S. regulators consider them untrustworthy, and ask them to permit our auditors to “look over their shoulders,” as it were, while they prepare bank confirmations. Initially NASDAQ insisted that this degrading procedure be conducted at the highest level of the bank. After we obtained written refusals from each of our banks, NASDAQ agreed to have the process carried out at our local bank branches.
No Zhiguo, you have it wrong.
Not solely because you are Chinese, but because several sources have exposed ABAT for being garbage (see here, here, here, and here, and of course here). Chinese garbage, it is true, but trash nonetheless. Further, it is not the banks that are considered untrustworthy (though some bank employees are likely involved in the subterfuge), it is the fetid collection of Chinese reverse merger companies that are listed in the US, and their filthy management teams that are untrustworthy.
No reasonable person can possibly believe anything coming out of China at face value. Not from the Communist government, not from its Prava-esque news services, not from the corrupt companies, not from the management teams, and not from the Western shills who aid and abet them. Stealing from the West is, simply put, endemic. Poison milk, poison animal feed, poison toothpaste, counterfeit goods, rampant piracy, and widespread fraud are the rule, not the exception.
If your financials were sound, you would not feel degraded, instead you would show the skeptics they were wrong, and feel vindicated. But wait, you have not done that, have you Zhiguo? Instead both the CFO and Controller of ABAT resigned, hardly a show of confidence.
our Chief Financial Officer, who had headed our accounting and finance operations since we formed the company in 2002, resigned. The pressure brought by the short sellers, class actions and regulators caused her to decide she should devote her time to ailing members of her family. Her resignation was immediately followed by that of our Controller. I myself have had to seek medical assistance for the effects on my health of this assault on our integrity and our efforts at being good U.S. corporate citizens. And so we have been unable to satisfy NASDAQ’s demands.
Pathetic. As for your health, Mr. Full of It, if you were being honest and had proven the critics wrong, wouldn’t you feel fantastic? Is your condition, if it is real, more likely the result of stress brought on from the realization that the game is over, and you have been discovered? The hilarity continues:
Since coming to the U.S. in 2004, ABAT and I have consistently complied with all U.S. laws and regulations. We have worked with great enthusiasm to try to reward our shareholders for their loyalty to our company. Today, unfortunately, I have lost confidence in the integrity of the U.S. capital markets, as I see how the reckless actions of a few persons have negated all of our good efforts.
Firstly, it appears that ABAT has not complied with all laws and regulations, ABAT seems to have continually failed to report related party transactions. See here. Secondly, it is the US capital markets that have finally lost confidence in Chinese scam artists. Don’t play the victim here, Zhiguo.
And Chairman Full of It concludes with the usual prattle designed to keep stuckholders believing in the dream:
But I remain committed to our shareholders. I believe that their faith in our company should be rewarded. So I write this letter to promise our shareholders that in the coming months I will take the actions that I believe are necessary to reward the loyalty of our shareholders.
On the following day, the 30th of November, ABAT shares were delisted from the NASDAQ and kicked down to the lowly Pink Sheets, closing the day at 41c, down from 97c immediately before the halt on 16 November, and down from over $4 in December of last year. Currently shares trade for a whopping 30c each.
Yes Zhiguo, keep rewarding that loyalty!
Oh, and an honorable mention for ABAT‘s IR man, Tim Clemensen of Rubenstein IR, for likely being the one to throw the SAT word “sophistic” into the letter. Tim, if it was you, the crew here at BuyersStrike! HQ are actually quite impressed, given your history of shilling for OTCBB trash like Mediabay (MBAY), Calypte (CBMC), China Direct Trade (CHDO), mPhase (XDSL), halted China Natural Gas (CHNG), and so many more. In the off chance that Zhiguo wrote it himself, then any excuses poor Mr. Full of It might throw up about not understanding the rules for US listed firms should fall on very deaf ears.
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