Puda Coal's Board Sued For Alleged Secret Chinese Sale

Law360, New York (May 13, 2011, 3:18 PM EDT) -- The board of directors of Puda Coal Inc. was hit with a shareholder derivative suit in Delaware on Thursday claiming it abdicated its fiduciary duty by not disclosing to investors that the company's chairman sold off its operating unit.

Puda shareholder Thomas Erhardt alleges that Puda Chairman Ming Zhao sold off Shanxi Puda Coal Group Co. Ltd., Puda's operating unit in China, to private equity firm Citic Trust Co. Ltd. in a series of transactions totaling approximately $416 million beginning in September 2009. The company's board...
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