China Natural Gas, Inc.

China Natural Gas, Inc.

Update

On June 2, 2016, the United States District Court for the District of Delaware approved a final settlement of the claims in this case for $1.15 million.

Please click the link in the right sidebar to download the order approving the settlement.

Original

On December 5, 2011, we filed a class action complaint against China Natural Gas, Inc. (CHNG), and various directors, asserting a class claim against CHNG for the immediate appointment of a receiver, and a derivative claim against the director defendants for breach of fiduciary duty.

The complaint details an ongoing pattern over the past 18 months of gross mismanagement, self-dealing and fraud at CHNG under the leadership of the Chairman of the Board, Qinan Ji, that caused a more than 80% rundown in the value of the Company’s shares, has prompted an investigation by the Securities and Exchange Commission (“SEC”), and now threatens the Company and its shareholders with irreparable harm from the imminent delisting of its shares from the NASDAQ Global Market.

The admitted misconduct by management includes (i) Ji’s receipt of a $19.6 million payment in connection with the Company’s acquisition of Lingbao Yuxi Natural Gas Co., Ltd., (ii) management’s issuance of millions of dollars in loans totaling to related third parties without approval by the Company’s Board, (iii) management’s acquisition of businesses and assets totaling $14.1 million without Board approval, and (iv) the Company’s failure to disclose a $17.7 million loan – representing a more than 50% increase in the Company's outstanding debt – in the applicable Form 10-Q and other SEC filings.

A copy of the complaint may be downloaded using the link in the right sidebar.

Persons with relevant information, and CNG shareholders with questions about this investigation, are invited to contact our Firm using the information below.

Contact

Ethan Wohl
212.758.4097