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Flatliner: ChinaCast's shares on the Nasdaq have been delisted
Troubled China education company Chinacast Education is likely to be delisted from the Nasdaq for being unable to file their annual reports for the year ending on December 31, 2011. The company has appealed the decision and a hearing will be made on June 28.
As reported previously, ChinaCast has been under extraordinary duress since ousting former CEO Ron Chan. After his removal, Chan was sued by the company for allegedly taking company chops and using them to transfer company assets and cash, as well as interfering with the company’s independent auditors.
By ‘interfering’ CT means that company documents were claimed to have been seized from the Shanghai office forcibly and a lawyer sent to intervene physically assaulted, according to SEC filings.
For this reason Nasdaq “did not believe that the company will be able to file its 2011 Form 10-K [annual report] within the time frame provided" according to a Nasdaq filing made on May 8.
It continued: “these developments raise serious doubts and uncertainties about the company’s capacity to operate its business, its financial and operational viability and, more fundamentally, its ability to assert legal title and control over its major corporate assets, including its three private colleges and cash held in its bank accounts.”
The loss of listing is a blow to the Company and also to the newly-arrived CFO Doug Woodrum. Trading in shares of Chinacast had been halted since April 2.