L&L Energy Plunges On GeoInvesting Report

Shares of L&L Energy (Nasdaq: LLEN), the U.S.-based coal company that does the bulk of its business in China, are plunging 8% today after a noted research firm said the company may not have acquired the Ping Yi Mine, which supposedly accounted for close to 40% of the company's total coal production for the financial year ended on April 30, 2011.

GeoInvesting the research firm that specializes in coverage of U.S.-listed Asian companies said L&L has recently been fighting "public allegations of fraud, mine shutdowns and falling profits." The research firm goes on to note that Seattle-based L&L is not the current owner of the Ping Yi Mine.

"The SAIC file of the Ping Yi Mine shows that the Ping Yi Mine is currently held by a private investment group, rather than the LLEN subsidiary, Fuyuan County Baoxing Economic & Trade Co., Ltd., the company identified as the acquirer of the mine in SEC disclosures," according to GeoInvesting.

In fact, GeoInvesting says the group that owns the mine put it up for sale in the latter half of 2011. L&L previously said in SEC filings it paid $3.96 million for the mine.

"The SAIC file we obtained with the official chop of Guizhou Province SAIC Office clearly shows that LLEN is not the owner of the Ping Yi Mine and that the current owners of Ping Yi Mine are Mr. Zhang Baoguo (40%), Mr. Hu Shiwei (30%), Mr. Liu Shuangyou (16%) and Mr. Chen Honglin (14%). Ping Yi Mine is a partnership and Mr. Hu Shiwei is the legal representative and executive partner of the Ping Yi mine. Based on our knowledge, these four individuals are not relevant to LLEN," GeoInvesting said.

GeoInvesting also said another mine L&L said accounted for about 40% of total revenue, the DaPuAn Mine, been completely shuttered. GeoInvesting, which has a short position in L&L, said its efforts to meet with management were rebuffed.