China Med­i­cal ex­ec­u­tives charged in US with steal­ing US$400m

New Straits Times - - Business -

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

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