Based on a Chinese news article on March 28, 2014, http://js.people.com.cn/html/2014/03/27/298155.html :

Lihua Intl (NASDAQ:LIWA) is in a serious debt crisis and its chairman Zhu Jianhua is being investigated by local police.

  • Claims include LIWA’s production activities substantially decreased in 2013.
  • After the Spring Festival of 2014 (Jan 31, 2014), LIWA production activities have almost ceased, however LIWA’s financial statement does not reflect LIWA’s alleged business operation downturn from 2012 to 2013.
  • LIWA’s cash flow is broken and local courts seized its warehouse.
  • There is a rumor that another company called Huihong International may take over LIWA.
  • Zhu Jianhua, LIWA’s chairman tried to move LIWA’s inventory which was collateral to its creditors allegedly hidden in garbage trucks
  • Local police are investigating Zhu Jianhua for larceny.