Focus on 3 Companies Accused of Fraudulent Behavior

by Lucas Scholhamer There are thousands of publicly owned businesses capable of reeling in lucrative profits and making shareholders wealthy. But it only counts if done legally, and it is sometimes difficult to differentiate between the legitimate companies and those that are too good to be true. Investment Underground took a deeper look at three businesses that have been accused of fraudulent behavior: Advanced Battery Technologies Inc. (ABAT): ABAT is a Chinese manufacturer of rechargeable Polymer Lithium-Ion batteries used in electric scooters, other electric motor vehicles, and numerous household items. Shares depreciated 1.38% to $1.43 at the time of writing, although the largest fall took place in late March, where stock prices dropped from $3.51 to $2.01 in a single day. ABAT has a very low P/E ratio of 2.5. Several analysts have done extensive research on ABAT to justify labeling the company as a fraud. One Seeking Alpha article uncovered some shady moves by its management, including a transaction in which ABAT Chairman Fu Zhiguo transferred his remaining holdings in Heilongjiang ZQPT, a major subsidiary, to ABAT back in 2006 (as reported in ABAT’s 2007 10-K filing), thus giving ABAT full ownership. Yet in ABAT’s2009 10-K filing, the company mentions that HLJ ZQPT is fully owned by…