You are right about how Drew Bernstein was appointed, which makes my argument actually even stronger. The investors who have money on the line put Drew there to oversea the audit committee to make sure nothing bad was going on. NOT Liu who could have appointed one of his own. Drew is unbiased, independent, a 40 year veteran of CPA, a partner in a firm and has said publicly through the press release that the allegations are categorically false. Those were DREW's words. Not Liu's.
Thank you for making my case even stronger by pointing out my error that Liu actually didn't appoint Drew. The investors did.
are you talking to me? No, the CEO did not handpick the board members in this case. In this case, it appears that the investors who contributed approximatley 23 million in the capital raise handpicked the new board members who make up the audit committee. Part of the capital raise agreement was the requirement of a majority of the board being independent. I think you should do a little reading of the SEC filings - particular the agreement with the capital raise - as you are simply mistaken according to the company. You can ask the company directly if the Chairman of the Board can kick out any of the board members and see what they say. any questions you want to ask to see if I know how ONP is claiming they are run in their filings or on their website? I would rather do that than what you are doing, speculating from some general idea I think I have about how companies are run that turns out to be erroneous in specific cases (and maybe generally as well in this case - you are aware, aren't you, of all the times Boards of Directors have kicked out founders, CEOs, and Chairman's of the Boards? If not, I can start providing you a list.)
There is no evidence it was the CEO. The Board of Directors decided to do the audit. Not sure it is a good sign when a board decides it is necessary to hire a law firm and a Big 4 firm in connection with investigating and auditing the management due to fraud allegations. More importantly,have they hired the law firm? the audit firm? if not, when will they? how long with the investigation and audit take? when do we expect a report on the investigation and audit? Many unanswered questions that seems it should not be that hard to answer, particularly if there is not fraud.
disclosure: short ONP.
Some short basher will reply to your post that the CEO can't sell because of the "quiet period" before earnings. If the companies a fraud why would the CEO be inclined to follow SEC rules? Too funny.
Also, the CEO had several years to sell his shares. Why didn't he sell if the whole operation is a scam? He's concentrating on building the company into one of the biggest multibillion dollar companies in China.
The downside here is almost none, the upside is 3x to 4x. If you're a smart investors, use this opportunity to add shares.
All Roth analyst says is that they suspend (not even downgrade) rating until the voluntary audit is done. Even in a downgrade, the most drop in stock price is only a few percent. Not 20% like this. Way oversold!