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Fool UK
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Company ran afoul of Sarbanes-Oxley right out of the IPO gate by giving the wife of its chairman and mother of its CEO $1.3 million for an acquisition it supposedly wanted to make. Strange how it also totaled the same amount of a loan she had made to the company but supposedly extinguished with a stock transfer when it IPO'd.Considering CEM bought up a bunch of companies she was running a few years ago, I wouldn't be surprised to see more skeletons falling out of the closet in the future.
Your right, however, it's not unusual for Chinese companies to have these transaction. Obviously, at the same time these are unacceptable in a publicly traded company.
People buy IPO's because it allows them to get in early at a cheap price but in doing so you take the risk the company is poorly led, fraudulent or naive.
CELM, as an IPO, had a grace period to implement Sabine-Oxley - a year I think. However, to their credit they got it done immediately and hired a top4 firm to do it [1]. Who pointed out the insider transaction which has been dealt with.
CELM also intends to upgrade their auditor - once again not the work of a company trying to work in the shadows. I intend to give CELM the benefit of the doubt knowing that the auditing is being beefed up - others might not.
I would also say that dexterfong@gmail.com , the CFO, is very open to questions even from small shareholders like myself.
rich
[1] http://app.quotemedia.com/quotetools/newsStoryPopup.go?storyId=31706694&topic=CELM&symbology=null&cp=null&webmasterId=95523