Frazer Frost, LLP is an international accounting firm. China Natural Gas Inc. ("CNG" or the Company) is a Chinese energy company with commercial, residential and industrial customers.
According to the Complaint filed on April 20, 2012, CNG filed its Form 10-K for the year ended December 31, 2009 with the SEC. This document failed to disclose, in a subsequent events note to the 2009 year-end financial statements, that in January 2010 the Company improperly loaned a related party a material sum and that, in February 2010, the Company obtained a bank loan in the amount of $17.7 million and in connection therewith caused its variable interest entity to pledge its equipment and vehicles located within China to secure the loan and guaranteed its repayment.
The Complaint further alleges that CNG's 2009 financial statements was materially false and misleading because these financial statements were not presented in accordance with Generally Accepted Accounting Principles ("GAAP"), nor were they audited in accordance with Generally Accepted Auditing Standards ("GAAS").
On June 20, 2012, the Court granted an order appointing lead Plaintiff and approving selection of Counsel.
On June 26, 2012, a consolidated Class Action Complaint for violation of the federal securities laws was filed by the Plaintiffs against the Defendants.
On March 28, 2013, the Court issued an Order granting the Defendant’s Motion to Dismiss without prejudice. An opinion explaining the reasons for this ruling will issue in due course, after which the Court will set and schedule any new pleadings. The Court also directed the Clerk of the Court to close items numbered 27 and 32 on the docket.
On September 24, 2013, the Court issued a Memorandum Order that granted the Defendants' motions to dismiss the Complaint, without prejudice and allowed the Plaintiffs to replead.
On October 23, 2013, the Plaintiffs filed amended consolidated Class Action Complaint against the Defendants. This Complaint was dismissed with prejudice by the Court on February 24, 2014.
