Puda Coal, Inc. (PINK: PUDA) could be in some serious trouble now that the latest news has hit the stands. Chairman, Ming Zhao transferred 90% of Shanxi Puda Coal Group’s stake in September 2009 to his personal control and the CEO, Liping Zhu was well aware of the transactions! Wait…what??

The SEC suspended trading in shares of PUDA on August 19, due to a lack of current and accurate information on the company. The suspension was due to be lifted yesterday and was expected by some to possibly reopen on the grey sheets. PUDA last traded at $3.23, down from a $6 halt back in April. (Read more)

If you want to read the full report on PUDA, it is quite extensive and nearly complete as far as I can tell… and it does not paint a pretty picture. (Read more)

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The Bottom Line

Perhaps this is why Zhao proposed a possible buyout… PUDA announced that it received a preliminary non-binding proposal from its Chairman, Mr. Ming Zhao to acquire 100% of the outstanding shares of common stock of Puda Coal in a going private transaction at up to $12 per share in cash. Purely speculative, but perhaps to cover his tracks… If PUDA opens on the greysheets, there could be a massive tank – keep an eye out for this stock to resume trading!

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Good Luck,

Ian Decker

Disclosure: No Position

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