China Medical executives charged in US with stealing US$400m
NEW YORK: The founder and a former executive of Beijingbased China Medical Technologies Inc were charged in the United States with stealing more than US$400 million (RM1.77 billion) from investors as part of a sevenyear scheme.
Chief executive officer Xiaodong Wu and former chief financial officer Tak Yung Samson Tsang allegedly lied about how they would spend the proceeds of note offerings from January 2005 to November 2012, said prosecutors.
They added the two men diverted more than US$400 million to entities controlled by or affiliated with them.
Wu and Tsang also allegedly forced China Medical’s independent director and outside auditor to resign, halted public disclosures of material events affecting its securities and ceased making interest payments.
The note offerings were based on intellectual property that was decades old, off-patent and had minimal value, according to prosecutors, here, where an indictment was unsealed on Monday.
Both men now living in China were fugitives, said prosecutors.
China Medical filed for Chapter 15 foreign-firm bankruptcy protection, here, in August 2012, listing as much as US$500 million in assets and debt. Bloomberg