9. One ofthe individual Defendants, Sirning Yang, stands out for the size of his trading. Although his employer - a New York-based registered investment adviser - has a stated policy that prohibited him from personal trading in~public companies, Yang (a) created Prestige Trade Investments Limited ("Prestige"), an independent wholly-owned LLC in the British Virgin Islands, (b) opened a brokerage account in Prestige's name just two weeks before Zhongpin announced the proposal to go private, (c) fueled the Prestige account with over $29 million transferred from overseas, and then (d) used those assets to purchase over 3 million shares of Zhongpin stock in the days leading up to Zhongpin's public announcement. On March 27, 2012, the first trading day after Zhongpin's announcement, Prestige garnered over $7.6 million in unrealized gains from its timely Zhongpin stock purchases.
"This investigation concerns the Board of Directors’ process for consideration of the proposed acquisition, and whether Zhongpin is acting in its shareholders’ best interests. Further, on April 4, 2012, the United States Securities and Exchange Commission filed an action against the Company’s directors for insider trading in connection with the proposed acquisition."
HOGS Investor files lawsuit attempts to stop the buyout:
On March 27, 2012, Zhongpin Inc. announced that its Board of Directors received a preliminary, non-binding proposal from its Chairman and Chief Executive Officer, Mr. Xianfu Zhu , which stated that Mr. Xianfu Zhu intends to acquire all of the outstanding shares of the Company's common stock not currently owned by him in a going private transaction at a proposed price of $13.50 per share in cash.
However, the plaintiff alleges that the offer by Chairman and CEO of Zhongpin Inc. is too low and wholly inadequate considering Zhongpin’s recent financial performance and the board of directors failure to shop Zhongpin Inc to third parties.
