China Agritech Inc. (CAGC) today announced that the Board of Directors, based on the suggestion of the company’s Audit Committee, has dismissed Ernst & Young Hua Ming as the company’s independent auditor starting from March 14, 2011.
CAGC said that the dismissal of Ernst & Young Hua Ming was made after thorough consideration by the Audit Committee, and the Board of Directors of the company.
China Agritechs, a Beijing-based producer of organic fertilizer, came under attack in early February from LM Research, a short seller in the company’s stock, claiming that China Agritech “is not a currently functioning business that is manufacturing products”. Instead it is, in LM R’s view, “a simple vehicle for transferring shareholder wealth from outside investors into the pockets of the founders and inside management.”
China Agritech said it has retained a “third part service provider to begin an investigation of LM Research.”