Rare Victory for U.S. Investor in Chinese Reverse Merger Company

Investors have lost billions over the last couple of years from investing in U.S.-listed Chinese companies that saw their share prices fall to mere pennies after short sellers accused them of fraud or auditors said their financial disclosures couldn’t be trusted.

This month a U.S. private equity investor has finally won a decision saying it was it was entitled to a refund on its investment in a fraudulent Chinese firm.

On Jan. 15, Starr International, an investment vehicle run by Maurice “Hank” Greenberg, the former chairman of AIG, filed to a Delaware court the findings of an arbitration committee in Hong Kong that had convened to determine whether Starr had been fraudulently induced to invest in Fujian-based media company China MediaExpress Inc.