The US Securities and Exchange Commission (SEC) charged herbal drug maker China Sky One Medical with securities fraud for overstating results in its financial statements, Reuters reported. The company allegedly reported US$19.8 billion in sales of a weight loss supplement under a 2007 distribution agreement with a Malaysian firm, but the company never entered into such an agreement. The regulator also charged CEO Yan-qing Liu, who certified financial results that included falsifications through 2010. MSPC, the company’s auditors, resigned in March following the resignation of a company director who claimed he had found it difficult to reach the company’s finance executives. The company’s CEO and lawyer were unavailable for comment. The China Sky One case follows on a string of similar actions by the SEC against US-listed Chinese companies.
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