HF Foods Group Stock - NasdaqGS: HFFG

HF Foods Group Stock – NasdaqCM: HFFG

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Hindenburg Research Alleges Undisclosed HF Foods Group Related-Party Transactions – Kehoe Law Firm, P.C. Investigating Potential Securities Claims Against HF Foods

Kehoe Law Firm, P.C. is making investors aware that on March 23, 2020, Hindenburg Research (“Hindenburg”) released a report alleging that HF Foods Group (“HF Foods” or the “Company”) (NasdaqCM: HFFG) was involved with “massive undisclosed related-party transactions.”  Hindenburg Research also alleges, among other things, that HFFG’s trucking subsidiary used shareholder cash to buy “an undisclosed fleet of exotic supercars” and that HF Foods Group’s auditor “has been asleep at the wheel.”

On this news, HFFG’s stock dropped during intraday trading on March 23, 2020, thereby injuring HFFG investors. 

According to Hindenburg Research (“HF Foods: 90%+ Downside on Massive Undisclosed Related-Party Transactions; Shareholder Cash Spent on Exotic Supercars & Outrageous Fundamental Valuation“):

  • HF’s massive $509 million merger with food distributor B&R appears to be a blatant undisclosed related-party transaction. [HF Foods] claimed that the deal was negotiated at “arm’s length”, but [Hindenburg] found multiple documents showing that both HF and B&R were part of the same Chinese investment group for years prior to the acquisition.
  • HF has transacted with at least 43 separate related-party entities in 2019 alone. Several are based out of the company’s own headquarters and appear to have no operations. [Hindenburg] visited others across the country and found red flags suggesting that these related parties are being used by insiders to extract cash from the business.
  • [Hindenburg] discovered that the company’s trucking subsidiary, ostensibly set up to transport food products, appears to have also used shareholder cash to purchase an undisclosed fleet of exotic supercars including Ferraris, Porsches, and a Bentley. [Hindenburg] found photos of the Chairman’s teenage son bragging on Instagram about them being his vehicles.
  • HF also directed over $2 million of shareholder cash to business entities owned by the Chairman’s teenage son, including one that bought another fleet of 7 Ferraris with vanity plates . . .. 
  • [Hindenburg] think[s] HF’s auditor has been asleep at the wheel. It was recently subpoenaed by the SEC for its work on iFresh (another Atlantic Acquisition SPAC mentioned above), and was lambasted in its recent Public Company Accounting Oversight Board (PCAOB) inspection report for a multitude of audit failures. [Some emphasis in original and emphasis added.]

HFFG investors who suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], to discuss the securities investigation or potential legal claims.

Kehoe Law Firm, P.C.