updated 12/16/2010 2:46:02 PM ET 2010-12-16T19:46:02

INDUSTRY, Calif., Dec. 16, 2010 (GLOBE NEWSWIRE) -- On December 13, 2010, Tongxin International Ltd. (Pink Sheets:TXIC) issued a press release stating that it has initiated legal proceedings against its former Chief Financial Officer and Chief Accounting Officer, Jackie Chang, regarding the alleged wrongful transfer of funds. The Law Office of Charles L. Grotts has been engaged by Jackie Chang to respond to the TXIC press release. 

In her capacity as CFO for TXIC, Ms. Chang learned of possibly unsubstantiated transactions in China between a subsidiary of TXIC and a related company in the amount of $7.7 million. As required by law, Ms. Chang asked the company's audit committee to pursue an audit and forensic procedures. TXIC's forensic accountant KPMG concluded that the documentary support for the transactions was contradictory, insufficient and lacking in substantive details and/or accuracy, thus calling in question the validity of the related party transactions. As a result, Ms. Chang declined to sign a representation letter, drafted by the company's statutory auditor, stating that the related party transactions were appropriately recorded, accurate, and complete.  

On November 17, 2010, Ms. Chang was contacted by and interviewed by the Enforcement Division for the Securities and Exchange Commission, which had initiated its own investigation of TXIC. Two days later, the Board of Directors of TXIC terminated Ms. Chang's employment without providing a reason although she had a written employment contract through 2012.

Ms. Chang's employment agreement with TXIC, as amended, requires the payment of 24 months salary to Ms. Chang within 15 days of termination without cause and issuance of 56,250 shares of company stock to her. Before she was terminated, the company's CEO authorized the establishment of a reserve account to ensure that Ms. Chang was paid in accordance with her employment agreement. TXIC has refused to comply with the terms of Ms. Chang's employment agreement.

Ms. Chang has filed an arbitration claim against TXIC with AAA in Michigan. She is seeking damages including punitive damages for wrongful termination, defamation and other wrongful conduct.


Law Office of Charles L. Grotts
1661 Hanover Road, Suite 208
Industry, CA 91748
TEL: (626) 810-0006
FAX: (626) 913-4770

CONTACT:  Law Office of Charles L. Grotts
          (626) 810-0006

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com