U.S. regulators have charged two China-based executives with defrauding investors of hundreds of millions of dollars to reap a huge profit for themselves.
The Securities and Exchange Commission has alleged that Puda Coal Inc.'s chairman Ming Zhao and former CEO Liping Zhu stole and sold Puda Coal's sole revenue-producing asset, a coal mining company named Shanxi Puda Coal Group.
The complaint also says that Zhao secretly transferred Puda Coal's controlling interest in Shanxi Coal to himself and then sold a substantial portion to a fund.
The executives did not seek approval from the board to make the transfer and never reported it to the SEC, according to officials. During an investigation into the case, Zhu admitted to forging a letter purportedly from CITIC Trust falsely stating that no funds had actually been loaned to Shanxi Coal and disclaiming any interest in Puda Coal's or Shanxi Coal's assets.
The scam enabled Zhao rather than Puda Coal's public shareholders to profit from a lucrative business opportunity, according to the document.
"Zhao and Zhu duped investors with promises that their money would be invested in a Chinese coal company when in fact the company was an empty shell that had been looted by the defendants," said Robert Khuzami, Director of the SEC's Division of Enforcement. "This enforcement action reflects our continuing commitment to hold accountable officers and directors of issuers who misuse their access to the U.S. capital markets to commit fraud for personal gain."
George S. Canellos, Director of the SEC's New York Regional Office, added, "The massive fraud perpetrated by Zhao and Zhu wiped out hundreds of millions of dollars in shareholder value and was compounded by their brazen obstruction of the SEC's investigation."
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Political News
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.