China Natural Gas, Inc. Investor Files Lawsuit Over Alleged Securities Laws Violations

If you purchased China Natural Gas, Inc. (NASDAQ:CHNG) common stock during the period from March 10, 2010 through August 19, 2010, you have certain options and there are strict and short deadlines running. Deadline: October 22, 2010. Those CHNG investors should contact the Shareholders Foundation, Inc.

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
China Natural Gas
Case Name: 
China Natural Gas Class Action 08/26/2010
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: CHNG
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/26/2010
Class Period Begin: 
03/10/2010
Class Period End: 
08/19/2010
Court of Filing: 
U.S. District Court for the District of Delaware
Deadline To File for Lead: 
10/22/2010
Summary: 

An investor of China Natural Gas, Inc. (NASDAQ:CHNG) filed a lawsuit in United States District Court for the District of Delaware against China Natural Gas, Inc over alleged violations of Federal Securities Laws.

China based China Natural Gas, Inc. is an integrated natural gas operator in The Peoples’ Republic of China, primarily involved in the distribution of compressed natural gas through its variable interest entity-owned CNG fueling stations. According to the complaint the plaintiff alleges on behalf of all purchasers of the common stock of China Natural Gas during the period from March 10, 2010 through August 19, 2010 that China Natural Gas, Inc. and its officers and directors violated the Securities Exchange Act of 1934 by issuing false and misleading public statements in its Annual Report for the year ended December 31, 2009 and its Quarterly Report for the quarter ended March 31, 2010, specifically that the defendants concealed the existence of a $17.7 million loan liability on its balance sheet, understated restricted cash by $17.7 million, improperly accounted for $45.6 million in senior notes as short term liabilities, rather than long term, and failed to disclose that it is in default under the senior note indenture. China Natural Gas total revenue increased by more than 300% within the past four years.

In 2006 China Natural Gas reported Total Revenue of $18.83million and in 2009 Total Revenue of $81.07million. Its Net Income increased from $5.45million in 2006 to $18.83million in 2009. China Natural Gas' stock traded as high as $14.81 per share in October 2009 but decreased since then in value. The plaintiff claims that as a result of defendants' false statements about China Natural Gas' financial condition, its stock traded at inflated prices - as high as $10.78 per share – between March 10, 2010 and August 19, 2010. On August 02, 2010 China Natural Gas' stock traded at almost 50% of the October 2009 value at $7.75 per share, and then fell to $6.50 per share after China Natural Gas announced on August 09, 2010 that it would reschedule its 10-Q quarterly earnings release.

On August 13, 2010, after the close of the market, China Natural Gas Inc announced that it would be amending its annual and quarterly reports. China Natural Gas Inc announced at that time the existence of the $17.7 million loan liability, the default under the indenture and that it would restate its financial statements to properly account for these matters. Then on August 19, 2010, China Natural Gas filed a Form 8-K in which it announced that its prior financial statements should not be relied upon. As a result, so the lawsuit, China Natural Gas' stock price dropped substantially, causing stockholders to suffer losses in their investments. From August 13, 2010 to August 25, 2010 CHNG shares fell from $6.64 to $5.18 per share and shares of China Natural Gas, Inc. (NASDAQ:CHNG) recently traded at $5.00 per share.