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May 25, 2015 6:15 AM ET

Food Products

Company Overview of AgFeed Industries, Inc.

Company Overview

On November 10, 2014, AgFeed Industries, Inc. went out of business as per its Chapter 11 liquidation filing under bankruptcy. AgFeed Industries, Inc., through its subsidiaries, engages in animal nutrition and commercial hog producing businesses in the People’s Republic of China. It involves in the research and development, manufacture, marketing, and sale of additive premix, concentrates, and complete feed for use in the domestic animal husbandry markets. The company also involves in raising, breeding, and selling hogs for use in pork production and hog breeding markets. It markets its animal nutrition products under the brand names of Advantage, Best, Best Growth, Best King, Best Silver, Bl...

100 Bluegrass Commons Blvd

Suite 310

Hendersonville, TN 37075

United States

Founded in 1995

1,756 Employees

Phone:

917-804-3584

Key Executives for AgFeed Industries, Inc.

AgFeed Industries, Inc. does not have any Key Executives recorded.

AgFeed Industries, Inc. Key Developments

AgFeed Industries, Inc. Announces $7 Million Class Action Settlement

AgFeed Industries, Inc. announced $7 million proposed class action settlement involving all persons who purchased company's securities from March 16, 2009 through and including September 29, 2011. Excluded from the Class are Defendants, all current and former directors and officers of AgFeed during the Class Period, members of their families and their legal representatives, heirs, successors or assigns and any entity in which Defendants have or had a controlling interest. Pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Middle District of Tennessee, that a settlement of the above-captioned class action has been proposed. A hearing will be held on December 8, 2014, before the Honorable Todd J. Campbell, United States District Judge, at the courthouse for the United States District Court for the purpose of determining, among other things: whether a Settlement Class should be certified for purposes of the Settlement and whether Class Plaintiffs and their counsel have adequately represented the Class Members; whether the proposed Settlement of the Class's claims against the Defendants for $7,000,000 should be approved as fair, reasonable and adequate; whether the proposed Plan of Allocation is fair, just, reasonable, and adequate; whether the Court should permanently enjoin the assertion of any claims that arise from or relate to the subject matter of the Action; whether the Action should be dismissed with prejudice against the Defendants as set in the Stipulation of Settlement filed with the Court; whether the application by Lead Counsel for an award of attorneys' fees and expenses should be approved; and whether the Lead Plaintiffs' application for reimbursement of costs and expenses should be granted.

AgFeed Industries, Inc. Announces Cessation of McGladrey LLP as Auditor

On March 7, 2014, AgFeed Industries, Inc. received a letter from McGladrey LLP, confirming that the client-auditor relationship between the Company and McGladrey has ceased.

SEC Charges AgFeed Industries and Top Executives in China and U.S. with Accounting Fraud

The Securities and Exchange Commission charged AgFeed Industries and top executives with conducting a massive accounting fraud in which they repeatedly reported fake revenues from their China operations in order to meet financial targets and prop up the stock price. The SEC alleges that four executives in China orchestrated the scheme at AgFeed Industries Inc. With the bulk of its hog production operations in China, the executives used a variety of methods to inflate revenue from 2008 to mid-2011, including fake invoices for the sale of feed and purported sales of hogs that didn't really exist. They later tried to cover up their actions by saying the fake hogs died. Because fatter hogs bring higher market prices, they also inflated the weights of actual hogs sold and correspondingly inflated the sales revenues for those hogs. The SEC also charged a company executive and a company director in the U.S. with scheming to avoid or delay disclosure of the accounting fraud once they learned about it in 2011 while engaged in efforts to raise capital for expansion and acquisitions. The SEC also reached a settlement with another U.S.-based company executive and a cooperation agreement with a different executive in the U.S. The eight executives involved in the SEC's case are no longer at AgFeed and has filed for bankruptcy. The SEC's complaint filed in U.S. District Court for the Middle District of Tennessee charges executive chairman Songyan Li, CEO Junhong Xiong, CFO Selina Jin, and began in 2008 after AgFeed acquired 29 Chinese farms for its new hog production division. The inflated numbers that included sales of fake hogs and bloated weights of actual hogs were recorded in a fake outside set of books that the company provided to its outside auditors. The inside real set of books contained accurate, lower revenue numbers that were hidden from auditors. Li, Xiong, Jin, and Ouyang caused AgFeed to report false revenues of approximately $239 million. According to the SEC's complaint, U.S. management learned of the accounting fraud by early June 2011, but failed to take adequate steps to investigate and disclose it to investors. Gothner and the CFO who replaced Jin after the merger, Edward J. Pazdro, specifically learned that AgFeed's China operations kept two sets of accounting books and that Ouyang had admitted to the fraud. Gothner and Pazdro even obtained a partial copy of the two sets of books as well as a memo from AgFeed's in-house counsel from China that concluded ­ based on witness accounts and documentary evidence ­ that the company was involved in a widespread accounting fraud. The memo noted that two sets of accounting books were maintained in order to make AgFeed's revenue and net income look better. The SEC alleges that instead of fulfilling their responsibilities as the company's stewards of financial reporting, Gothner and Pazdro failed to conduct or prompt the company to conduct any further meaningful investigation into the misconduct. Not only did they fail to disclose the fraud to investors or law enforcement, but Gothner and Pazdro instead engaged in efforts to spin off the company's feed division and raise capital for expansion and acquisitions that would enable profits for AgFeed and them personally. Even as additional red flags arose in June and July 2011, they faile to take appropriate actions. They misled AgFeed's outside auditor and caused the company to issue false and misleading press releases and SEC filings. The SEC's complaint charges AgFeed, Xiong, Li, Jin, Ouyang, Gothner, and Pazdro with violating or aiding and abetting violations of the anti-fraud, reporting, books and records, and internal controls provisions of the federal securities laws. Xiong, Li, Jin, Ouyang, Gothner, and Pazdro also are charged with making false statements to AgFeed's outside auditors. The SEC's complaint seeks disgorgement of ill-gotten gains plus prejudgment interest as well as financial penalties and officer-and-director bars. The SEC also seeks to suspend Jin, Ouyang, and Pazdro from practicing as accountants on behalf of any publicly-traded company or other entity regulated by the SEC.

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