China MediaExpress Holdings, Inc. (fka CCME)

[Gene_finder]

Can somebody uses interest income as argument for fraud? I think that this is weak argument. Some other companies also earn very little interests. I remember that somebody pointed out that CCME also earn very little interests for its cash.

http://www.citronresearch.com/index.php/2010/09/14/china-biotics-chbt-is-a-fraud-%E2%80%93-now-sue-citron-we-dare-you/

China Biotics claims its cash in the bank is $159.7 million in the bank, according to its June 30 SEC filing – every dollar of which is supposedly available for corporate purposes. Yet it reports interest of just $87,876. So where is the interest? . How can the company be earning interest of less than 1/10th of comparable companies? Companies with large cash balances earn interest. Interest rates on free cash balances in China earn 1% for 3 month to 1 year term deposits, and 2% for 1 to 2 year term deposits.

Simple math tells us that at 1% interest the cash should generate $400,000 per quarter in interest income. At 2% this same cash balance should generate $800,000 per quarter.