China Growth Stocks

[Knowledge is King]

NEP PR announces resignations galore



PRW: China North East Petroleum Holdings Ltd. Receives Non-Compliance Notificati
on from NYSE AMEX LLC; Stock Trading Halt

HARBIN, China and NEW YORK, May 27 /PRNewswire-Asia-FirstCall/ -- China
North East Petroleum Holdings Ltd. (the "Company" or "NEP") (NYSE Amex:
NEP), a leading independent oil producing and oilfield services company in
Northern China, today reported that On May 25, 2010, the Company received a
written notice from NYSE AMEX LLC ("AMEX") advising that the Company is not
in compliance with AMEX's continuing listing criteria set forth in Sections
134 and 1101 of the NYSE Amex LLC Company Guide (the "Company Guide").
Specifically, AMEX noted that the Company has not timely filed its annual
report on Form 10-K for the fiscal year ended December 31, 2009 and its
quarterly report on Form 10-Q for the quarter ended March 31, 2010
(together, the "Reports"). In addition, AMEX stated that the Company's
failure to file its Reports is a material violation of its listing
agreement. Pursuant to 1003(d) of the Company Guide, AMEX is authorized to
suspend, and unless prompt corrective action is taken, remove the Company's
common stock from AMEX. AMEX halted trading of the Company's common stock on
the same day.
As the Company disclosed in its current report on From 8-K filed on April
16, 2010, AMEX required that the Company submit a plan of compliance by
April 29, 2010 with the action the Company has taken, or will take, to file
the 10-K for 2009 and bring the Company into compliance with the listing
standards no later than July 14, 2010 (the "Plan"). As AMEX required, the
Company submitted its Plan on April 29, 2010, which the Corporate Compliance
Department of AMEX currently is evaluating. As stated in the current notice
from AMEX, the Company may supplement its Plan until June 8, 2010. The
Company intends to submit such supplement by June 8, 2010.
The Company also previously disclosed in a press release issued on April
16, 2010 and as an exhibit to its current report on From 8-K filed on April
16, 2010, that, in the process of the Company's 2009 year end audit review,
the Company identified potential internal control deficiencies over
financial reporting in connection with certain expenditures relating to
business development activities and the accounting treatment of certain of
the Company's accounts payables. In response, on April 15, 2010, the Board
of Directors directed and authorized the Audit Committee of the Board of
Directors (the "Audit Committee") to conduct a thorough review of the
situation and to determine what corrective action, if any, should be taken.
On April 19, 2010, the Audit Committee retained the services of John Lees
Associates Limited of Hong Kong ("JLA") to conduct a forensic audit of the
Company's bank accounts with respect to the expenditures relating to
business development activities in question. The forensic audit
preliminarily found that in 2009, cash transfers occurred between the bank
accounts of the Company and its subsidiaries and the personal bank accounts
of Mr. Hongjun Wang, the Company's chief executive officer, and Ms. Guizhi
Ju, a Company director and mother of Mr. Hongjun Wang. The forensic audit
has confirmed that some of the transferred funds were used to pay the
Company's expenses. To date, there is no indication that any of the funds
were used for personal purposes. The forensic audit is ongoing.
Immediately following the JLA preliminary report, on May 6, 2010, the Board
of Directors adopted a specific policy that none of its assets, including
cash, should be transferred or paid to any officer or director of the
Company or its subsidiaries for any purpose without the approval of the
Audit Committee other than (i) payment of transfers pursuant to service
agreements between the Company and its officers and directors duly
authorized and adopted by the Board of Directors or its committees; or (ii)
reimbursement of reasonable expenses not exceeding $10,000 in any given
week.
After an update of the preliminary report by JLA, the Board called a
special meeting to discuss the situation on May 21 and 22, 2010. As a result
of these meetings, on May 23, 2010, the Board through unanimous written
consent took the following corporate actions:

(i) Accepted the resignation of its chief financial officer, Mr. Yang
Zhang, and appointed Mr. Andrew Kan from JLA to serve as interim
acting chief financial officer until a permanent chief financial
officer is duly appointed.
(ii) Accepted the resignation of Ms. Ju as a director of the Company.
(iii) Accepted the resignation of Mr. Hongjun Wang as the Chairman of the
Board but allowed him to continue as a director pending the outcome
of the current forensic audit.
(iv) Appointed the Company's independent director, Mr. Edward Rule, as
Chairman of the Board.
(v) Placed Mr. Hongjun Wang on administrative leave as chief executive
officer pending the outcome of the current forensic audit.
(vi) Appointed the Company's independent director, Mr. Jingfu Li, as the
interim acting chief executive officer.
(vii) Directed that all expenditures of the Company and its subsidiaries
over US$10,000 be approved in advance by the Chairman of the Audit
Committee.

The Company believes that these remedial measures will prevent further
failure of the Company's financial controls and procedures and preserve the
assets of the Company. As the forensic audit continues, the Company is
treating this serious matter with the utmost urgency. Upon further findings
of the forensic audit, the Company will continue to implement measures as
the situation demands.
About China North East Petroleum
China North East Petroleum Holdings Limited is an independent oil company
that engages in the production of crude oil in Northern China. The Company
is a pioneer in China's private oil exploration and production industry, and
the first Chinese non-state-owned oil company trading on the NYSE Amex.
The Company has a guaranteed arrangement with the PetroChina to sell its
produced crude oil for use in the China marketplace. The Company currently
operates four oilfields in Northern China. The Company also recently added
an oil service subsidiary through its acquisition of Song Yuan Tiancheng
Drilling Engineering Co. Ltd. ("Tiancheng"). For more information about the
Company, please visit http://www.cnepetroleum.com .
Statements in this press release, including but not limited to those
relating to the Company's or management's intentions, beliefs, expectations,
hopes, projections, assessment of risks, estimations, plans or predictions
for the future, including the impact of the restatement, timing of filings
with the SEC and other statements that are not historical facts are
forward-looking statements that are based on current expectations. Although
the Company believes that its expectations are based on reasonable
assumptions, it can give no assurance that these expectations will prove
correct. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include delays and
uncertainties that may be encountered in connection with the restatement,
final audits and reviews by the Company and its auditors, and other risks
described in the Company's annual report on Form 10-K for the year ended
December 31, 2008 and its other filings with the SEC. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual outcomes may vary materially from those indicated.
Investors should not place undue reliance on forward-looking statements.
Each forward-looking statement speaks only as of the date of the particular
statement and the Company undertakes no duty to update any forward-looking
statement.

For more information, please contact:

United States:
Chao Jiang
Senior Vice President, Corporate Finance
Tel: [phone]
Email: [e-mail]

Bill Zima
ICR, Inc.
Tel: [phone]

SOURCE China North East Petroleum Holdings Ltd.
/CONTACT: United States: Chao Jiang, Senior Vice President, Corporate, +1-
212-307-3568, [e-mail], of NEP; Bill Zima,
[phone], of ICR, Inc.
/Web site: http://www.cnepetroleum.com