Chinese Bondholders Group Complains to SEC About Lax Enforcement and `Double Standard'

Chinese Bondholders Group Complains to SEC About Lax Enforcement and `Double Standard'

October 18, 2007

Calls SEC and credit rating agencies `silent accomplices'
in Chinese bond fraud

    WASHINGTON, Oct. 18 /Xinhua-PRNewswire/ -- Announcement
by American Bondholders Foundation -- The head of the
American Bondholders Foundation charged in a complaint
filed with the U.S. Securities and Exchange Commission that
the People's Republic of China is defrauding American
investors.

    The complaint filed by the Tennessee-based group of
Chinese bondholders accused the Chinese government of
attempting to "perpetrate a deception upon the
investing public through omissions of fact (in the form of
`half-truths') and the intentional concealment of material
facts..."

    "The Securities and Exchange Commission has been
lax in enforcing disclosure requirements against
China," said ABF President Jonna Z. Bianco.

    "If America's investing public knew and understood
the details of the dark history of China and its refusal to
pay its debts to Americans, China would not be able get
another dime from the American people". 

    "Thousands of Americans who invested in pre-1949
bonds to help China at a time when China desperately needed
help can now attest to the fact that poisoned pet food and
toys are not the only bad things to come out of China.  The
Chinese government continues to peddle new bonds while
refusing to honor bonds issued in the past. 

    "And the most shameful dimension of all of this is
the U.S. Securities and Exchange Commission sits as a silent
accomplice while more Americans are exposed to the
swindle." 

    "The credit rating agencies, Standard and Poor's,
Moody's and Fitch are clearly aware of China's defaults,
yet turn a blind eye in order to rake in immense profits
from China even though giving premium credit rating status
to the People's Republic of China enables the opportunity
for more losses to American investors.  The rating
agencies' failure to acknowledge China's default by
assigning the truthful `Selective Default' rating
classification to the Chinese government (as required by
the rating agencies' own published definitions and rating
criteria) reveals the credit rating agencies' complicity
with China in the perpetration of a fraud upon the
investing public.  Investors have experienced the
devastating effects firsthand from similar scandals in the
past, including World Com, Enron, and most recently, the
sub-prime markets ... when will it end?"

    The ABF Complaint was addressed to SEC Chairman
Christopher Cox and three other officials of the federal
agency. It requests that the SEC "hold the People's
Republic of China, their state-owned enterprises,
businesses and corporations to the very same policies and
procedures, rules and regulations, laws of proper
disclosure and reporting requirements that U.S. businesses
and corporations are required to adhere to."

    The American Bondholders Foundation, LLC is an
organization comprised of U.S. individual owners of Chinese
Government full faith and credit bonds issued prior to 1949
and due to mature in 1960, which seeks to require China to
abide by settled international law and honor its
contractual sovereign obligations to bondholders.

     China has refused to make payments to American
bondholders even though it settled the claims of British
bondholders in 1987.


    For a copy of the complete ABF- SEC complaint, please
contact:

     James Lafferty, Press Secretary
     American Bondholders Foundation, LLC
     Tel: [phone]
     2840 Glasscock Road
     Lewisburg, TN 37091
     http://www.americanbondholdersfoundation.com
     http://www.globalsecuritieswatch.org