Harbin Electric (NASDAQ:HRBN)

Below is the GeoTeam's view on HRBN's buyout proposal.

As of September 21, 2011, the risk equation at Harbin Electric (HRBN) has fundamentally changed due to the release of 2 new pieces of information which essentially prove that HRBN has made material misrepresentations to the SEC, the NASDAQ and to China Development Bank. The size and nature of these material misrepresentations is now too big and too public to be ignored by the SEC, the NASDAQ or China Development Bank. There now exists a very real basis for the NASDAQ to halt /delist the stock and for CDB to walk away from the financing.

The irrefutable misrepresentations boil down to this:

• One of HRBN's major customers doesn't even know who HRBN is!
• The Bait and Switch (ala YUII.PK): Creating a phony land acquisition and then attempting to replace it with another transaction after having been exposed.

To see the rest of our commentary on these developments, please go here.