Newlead Holdings Ltd. (fka NEWLF)

[GaryJPalys]

$NEWL NEWS OUT!!! And it's a doosey :)

And in case anyone thinks it's old news, it's not! It's from today... https://www.google.com/#q=Newlead%2BTransasia&newwindow=1&safe=off&tbm=nws


http://www.tradewindsnews.com/weekly/357287/allegations-from-nasdaq-shine-new-light-on-newlead-delisting

Allegations from Nasdaq shine new light on NewLead delisting

Litigation against NewLead Holdings has revealed allegations by the Nasdaq stock exchange that the Michael Zolotas-led owner demonstrated a “disturbing pattern” of misstating facts to the investing public before it was delisted last year.

Filings in the New York Supreme Court reveal for the first time that the stock exchange delisted the company because of what it said were at least four “false and misleading” disclosures that allegedly overstated asset values, misrepresented a “balance sheet programme” and claimed that company was renting non-existent office space from a company controlled by Zolotas, NewLead’s chief executive.

The accusations by the New York exchange emerged as part of a lawsuit by TransAsia Commodities against NewLead over a failed coal sales deal. Lawyers for Serge Turko-lead TransAsia last week asked a judge to take the rare step of entering a judgment against the owner over alleged “undisputed untruthfulness” in the court case.

A NewLead spokeswoman declined to comment on the allegations because of the ongoing litigation with TransAsia.

“Each side has its own perception and understanding of how things are and it remains to be seen who the judge will agree with,” she said. “We are only pleased that we are now closer to the end of this dispute.”

New York Supreme Court Judge Charles Ramos has ordered the company’s Reed Smith lawyers to appear before him on Monday to explain why he should not enter the judgment against the company.

We are only pleased that we are now closer to the end of this dispute.

As part of the $6.2m court fight, TransAsia used a subpoena to obtain the June letter from Nasdaq, which was not made public until now, explaining why NewLead was to be delisted from the exchange.

In the letter, Nasdaq’s senior director for listing qualifications, Stanley Higgins, wrote that NewLead’s disclosure practice “harms current and prospective investors, depriving them of information required to make meaningful and informed investment decisions, and also impugns the integrity of the market to the detriment of all market participants”.

The allegedly misleading public disclosures included NewLead’s statement in its 2013 annual report that it was paying Zolotas’ Aurora Properties $42,000 to rent office space plus as much as $270,000 per year in administrative expenses. The payments were “nothing of the sort”, Higgins wrote.

Instead, NewLead later explained in a securities filing that it instead issued shares to Zolotas to reimburse him for travel and other expenses but the Nasdaq official said there was no explanation as to how “such a detailed false account” of payments appeared in the company’s public filings. NewLead explained in July that it did not rent any property in New York but called the mischaracterised prior disclosure “immaterial”.

Nasdaq also focused on a $44.8m “balance sheet programme” that was touted in June 2014 as a way to help buy a handysize bulker and coal-mining assets. Instead, Higgins said it involved the issuance of shares to pay a court settlement in a lawsuit. “The subsequent supposed benefits set forth by the company publicly were illusory and false,” the Nasdaq official wrote.

Also cited in the letter was a deal in which NewLead claimed that it received a capital contribution of $236m from NM Kandilis in the form of nickel wire, in exchange for a 36.8% share in the company, which TradeWinds has reported. When auditor PricewaterhouseCoopers hired Duff & Phelps to carry out a valuation analysis, the metal was shown to be worth between $4,000 and $4.1m, Nasdaq said. The deal fell through and NewLead later admitted that the nickel wire was overvalued.

And the stock exchange criticised the September 2013 claim by the owner that it signed deals to buy two coal mines and a coal wash plant for $68m. But Higgins wrote that there was only contract for one mine, with negotiations ongoing for the remaining assets, and the transactions totalled $42m. NewLead issued two corrected press releases.

Last year, NewLead told the US Securities and Exchange Commission (SEC) that the Nasdaq intended to delist it over false and misleading disclosures but did not give details.

The owner, whose over-the-counter (OTC) shares were worth just 1.6 US cents this week, said it decided to “voluntarily” delist before an upcoming hearing on the decision. The company has filed papers to move its listing to the OTC QB marketplace.

Meanwhile, TransAsia says its effort to seek a judgment at this stage in the case is extraordinary but warranted because of NewLead’s and its co-defendants’ alleged willingness to “manipulate facts and evidence”, for example, by allegedly submitting false affidavits and what Trans­Asia claims is a forged contract. The trader suing the shipowner, Zolotas, coal mining joint venture NewLead JMEG and its chief executive Jan Berkowitz on allegations that they agreed to sell coal that they did not have. The defendants have denied the charge.

“For [the] defendants, ‘facts’ are a fluid concept, depending on whether they are dealing with TransAsia, Nasdaq, creditors, the stock-buying public, or this court,” said the TransAsia’s Cozen O’Connor lawyers.

NewLead owns five bulkers and six (correction 5) tankers.