Reuters: Regulatory News: UPDATE 1-ChinaCast says unable to resume normal operations

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UPDATE 1-ChinaCast says unable to resume normal operations Apr 2nd 2012, 13:30 Mon Apr 2, 2012 9:30am EDT * Says former CEO Chan disrupting operations * Chan says he is being accused of insider trading * Company sues Chan to recover seals and licenses April 2 (Reuters) - ChinaCast Education Corp said it is unable to resume normal operations in Shanghai as its recently fired chief executive was disrupting management transition and refused to part with some company property. ChinaCast, which has filed lawsuits against former CEO Ron Chan, also said it is investigating whether there were questionable activities involving its current and former employees. It did not reveal what these activities were. In a separate statement, Chan said the new management has blamed him for engaging in insider trading, but denied the allegations. Last week, ChinaCast -- which provides post-secondary and online education services -- fired Chan as the top executive of the company and replaced him with Derek Fend in the interim. Chan, a co-founder of ChinaCast, has served as CEO since 1999. Chan had strongly opposed shareholder Ned Sherwood's move to appoint three directors to the company's board. Sherwood eventually won the proxy war in January. In a regulatory filing on Monday, ChinaCast said Chan refused to part with company seals, business licenses and financial seals of its Chinese subsidiaries. The company has sued him to recover these along with the accounting books of its Chinese units. Chan also appeared at ChinaCast's Shanghai office and "tried to assert control over the business by refusing to comply with the terms of his termination," the company said. The company warned that if its efforts to regain control of its assets in China are unsuccessful, there may be a significant material adverse effect on its business. ChinaCast's shares, which have lost about 30 percent of their value in the last 50 days, closed at $4.24 on Friday on the Nasdaq. Link this Share this Digg this Email Reprints

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