The U.S. Securities and Exchange Commission and the Nasdaq Stock Exchange should reevaluate Chinese distant-water fishing firm Pingtan Marine Enterprise’s public listing, according to the Washington, D.C., U.S.A.-based nonprofit Center for Advanced Defense Studies, which provides analysis on transnational security issues.
C4ADS’ new report, “Net Worth,” alleges Pingtan Marine and its subsidiaries have been involved in illegal fishing, labor abuse, and wildlife poaching. Vessels operated by Pingtan and its affiliates have been prosecuted for various fishing-related offenses in China, Ecuador, Indonesia, and Timor Leste, the report found.
As a result, the U.S. SEC and the Nasdaq exchange should “determine whether the company’s history of illicit activity, as well as its failure to submit required financial documentation in a timely manner, warrant its delisting from the Nasdaq stock market,” C4ADS said.
Pingtan Marine's operations are closely entwined with those of Fuzhou Honglong Ocean Fishing Company, which was initially established in 1995 by the CEO of Pingtan Marine Enterprise, Zhuo Xinrong, according to the report. Fuzhou Honglong is currently owned by Zhuo Longjie, the brother of Zhuo Xinrong, and is often cited as an affiliated party of Pingtan Marine in its reporting to the SEC.
Pingtan Marine was created through a reverse merger, a process by which companies can enter American capital markets without the due diligence required before an initial public offering. In 2012, China Equity Growth Investment (CGEI) merged with China Dredging Group Co. and Merchant Supreme Co. on the same day. CGEI, the surviving company, then changed its name to Pingtan Marine Enterprise Limited in February 2013.
Pingtan Marine has nearly tripled the size of its fleet in recent years, according to C4ADS, and the Chinese government continues to authorize Pingtan Marine to operate abroad. In its report, C4ADS called on the Chinese government to cease its subsidization of Pingtan Marine’s illegal activity in light of “proven instances of illicit activities conducted by their vessels around the world.”
C4ADS also called on China’s fisheries authorities to improve transparency and traceability requirements for the country’s distant-water fleet, “in order to ensure the compliance and sustainability of Chinese fishing abroad.”
Pingtan has been repeatedly sanctioned by the Nasdaq Stock Exchange for late publication of its results and inadequate reporting of corporate activity. And on 7 December, 2021, the U.S. State Department issued a notice that it had “revoked more than 15 visas for those complicit in IUU fishing who also have links to human trafficking, including associates of Pingtan Marine Enterprise.” The company has made no announcement to investors about the sanction and didn’t respond to a request from SeafoodSource for comment.
SeafoodSource contacted Nasdaq and Pingtan for comment but had not received a response from either entity as of 20 April.
Photo courtesy of C4ADS
