China Zhongwang responded to a United States criminal indictment against it and its controlling shareholder Liu Zhongtian on Sunday, saying that despite being served no official notice of the charges, the company has already sought out legal advice regarding the matter.
In a filing made to the Hong Kong Stock Exchange, Zhongwang acknowledged the Federal indictment against it on allegations that it evaded US$1.8 billion in aluminium import tariffs by shipping fake semis into the United States. However, Zhongwang says neither it nor Liu has been formally served with legal notice of the charges.
Nevertheless, Zhongwang assured shareholders that it has already taken steps to defend itself against the charges.
“The Company takes seriously any allegations that it may have violated any law, and is seeking legal advice in relation to the Alleged Proceeding. The Company will keep the shareholders of the Company and public informed of any further material development relating to the Alleged Proceeding which it becomes aware of.”
Zhongwang continued by saying it does not expect the charges to adversely impact the company’s operations to a meaningful degree, and it continues to operate as usual. The firm also promised to update shareholders should the situation change.
Last Wednesday the Department of Justice announced charges against Zhongwang, Liu, two other individuals, and six other related firms for allegedly fraudulently importing aluminium as a finished product in order to evade duties on raw aluminium, and using aluminium shipments to artificially boost revenue.
The defendants face charges of conspiracy to defraud the United States, wire fraud, smuggling goods into the United States, money laundering, and aiding and abetting. If convicted of all counts, the defendants could face a prison sentence of over four centuries in length as well as forfeiting to the United States government any property derived from funds traceable to the offenses.