Robbins Umeda LLP Announces an Investigation of Keyuan Petrochemicals, Inc. for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Keyuan Petrochemicals, Inc. (NASDAQ: KEYP). Keyuan distributes petrochemicals throughout China. Keyuan was formerly known as Keyuan International Group Ltd. and changed its name to Keyuan Petrochemicals, Inc. as a result of a reverse merger with Silver Pearl Enterprises, Inc. on April 23, 2010. The company was founded in 2007, is based in Ningbo, China, and is incorporated in Delaware.
Robbins Umeda LLP’s investigation focuses on whether the directors and officers of Keyuan harmed the company by issuing false and misleading statements about the company’s financial results. On April 1, 2011, Keyuan announced that it had not completed its 2010 consolidated financial statements by the March 31, 2011 deadline. The company has applied for an extension with the U.S. Securities and Exchange Commission and is required to file the Annual Report by April 15, 2011. The company also announced that “the accounting review conducted to date had identified various concerns” with cash transactions and recorded sales that prompted the company’s audit committee to undertake an independent investigation. As a result of the delay in filing and the investigation by the audit committee, Keyuan requested a trading halt from NASDAQ.
Also on April 1, 2011, Keyuan filed a Form 8-K with the SEC stating that its auditors informed the company “that there is a possibility that we may be required to make certain adjustments to certain of our previously issued financial statements, and that such previously issued financial statements may not be relied upon.”
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