Case No. 

UNITED STATES DISTRICT CO 

SOUTHERN DISTRICT OF FLORIDA 

- Civ ---

Gang Chen, 

Plaintiff 

vs. 

China Green Agriculture, Inc., 

Zhuoyu Li and Yongcheng Yang 

Defendants 

JUN O J 2020 

ANGELA E. NOBLE 

CLERK U.S. DIST. CT. 

S. D. OF FLA. - FT. PIERCE 

COMPLAINT ALLEGING SECURITIES FRAUD 

I, Gang Chen, plaintiff, in the above styled cause, sue defendants: China 

Green Agriculture, Inc.("CGA"), Zhuoyu Li("Li") and Y ongcheng 

Yang("Yang"). This action is filed under Sections l0(b), 20(a) and 

21B(b)(3) of the Securities Exchange Act of 1934 (the "Exchange Act") 

and Rule 1 0b-5 thereunder 17 CFR 240.1 0b-5 against defendants for 

engaging in a Fraudulent Financial statement scheme which damaged 

minority stockholders, including Plaintiff. Defendants intentionally 

cause fake statements of material information in the company quarterly 

and annual financial reports with fake revenue, income, shipment 

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Case 2:20-cv-14181-KAM Document 1 Entered on FLSD Docket 06/05/2020 Page 1 of 13
volume, Income tax and other financial data. Plaintiff seeks recover of 

actual damages in excess of $1.25 million and extra $500,000 or more 

from CGA and $100,000 from each individual defendants of Punitive 

damage for the fraud. 

JURISDICTION AND VENUE 

This Court has subject-matter jurisdiction over this action pursuant to 

Sections 21(d)(l), 2l(d)(3)(A), 21(e) and 27(a) of the Securities 

Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § § 78u( d)(l ), 

78u(d)(3)(A), 78u(e) & 78aa(a) 

The venue is proper pursuant to 28 U.S. Code 139l(b)(2). "a 

substantial part of the events occurred and a substantial part of 

plaintiffs property that is the subject of the action is situated in Vero 

Beach, Florida. The Plaintiff, Gang Chen, is a resident of Florida. 

Plaintiff read the fraudulent financial statement therefore purchased 

and sold the company stock in Florida throughout the relevant 

period. The cause of action accrued in Florida. 

Although the Defendant CGA is incorporated in Nevada, they 

operate all their business and keep all their property in the People's 

Republic of China, while the Individual Defendants all reside in 

China. 

PARTIES 

1. Plaintiff Gang Chen, a retired Florida citizen and a private 

investor. Plaintiff has been trading CGA stock online from home 

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since December 2016. Plaintiff purchased CGA common stock 

mainly based on the fraudulent financial statement therefore 

suffered damages over $1.25 million as a result of defendants' 

violations of the federal securities laws alleged herein 

2. Defendant CGA is a public company, incorporated in Nevada, 

operated in China and listed on the New York Stock Exchange. 

CGA is engaged in research, development, manufacture and 

distribution of fertilizers and Agriculture products mainly through 

its wholly-owned Chinese subsidiaries: Jinong Shaanxi TechTeam 

Jinong Humic Acid Product Co., Ltd. ("Jinong"), and Beijing 

Gufeng Chemical Products Co., Ltd., ("Gufeng") and Yuxing 

Agriculture Technology Development Co., Ltd. ("Yuxing"). 

Among the three major subsidiaries, Gufeng will be focused in the 

complaint. CGA ceased investor relation activities in 2018 and, as 

of May 2020, has not held an earning call for 10 quarters. CGA 

kept filing quarter and annual reports with SEC. However, all the 

reports are false and misleading. CGA made a reverse stock split of 

the Company's Common Stock at a ratio of 1-for-12 on June 28, 

2019 due to the previous stock price long time traded below $1 

minimum. Because their suspicious and deceptive behaviors, the 

stock price dropped from $19 .20, the highest close price of the 

relevant period, on first week of January, 2018 to the lowest $1.84 

on March 9, 2020; now it is trading around $2.60. 

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3. The Individual Defendants: Zhuoyu Li is CEO and chairman of the 

board of directors since 201 7, president since 2016 and Y ongcheng 

Yang is chief financial officer since 2017 and Vice President of 

Finance since 2016. 

4. Defendants Li and Yang are collectively referred to hereinafter 

"Individual Defendants." The Individual Defendants, because of 

their positions with CGA, possessed the power and authority to 

control the contents of the Company's reports to the SEC, press 

releases, and presentations to investors. Each of the individual 

defendants was provided with copies of the Company's reports and 

press releases alleged herein to be misleading prior to, or shortly 

after, their issuance and had the ability and opportunity to prevent 

their issuance or cause them to be corrected. Because of their 

positions and access to material non-public information available 

to them, each of the Individual defendants knew that the adverse 

facts specified herein had not been disclosed to, and were being 

concealed from the public. 

DEFENDANTS' MATERIALLY FALSE AND MISLEADING 

STATEMENTS CAUSE SUBSTANTIAL LOSSES TO 

INVESTORS 

5. the first CGA financial statement Plaintiff ever read is CGA 

quarterly report, form 10-q, for the quarterly period 

ended September 30, 2016. According to this financial statement, 

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CGA has cash and cash equivalents $108, 121,059, total asset 

$412,443,256, total liability $84,444,713; net sales $61,884,622, 

net income $7,351,580.CGA has total 3137384(3764860512/1 

split) outstanding shares, stock market price $17 .40 at that time. 

Therefore the stock has price/book 0.14, price/earning 1.88, 

price/sale 0.2 and each share has cash $34. The stock seems so 

attractive to an ordinary private investor, like Plaintiff. 

6. Since then, Plaintiff has read total 11 of quarterly reports of 1 OQ 

and 3 of Annual reports of 1 OK filed by CGA. Most of the reports 

with similar attractive financial data as their first financial 

statement Plaintiff first read. 

7. For example, in the last annual report for fiscal year ended June 30, 

2019, it stated: cash and cash equivalents $72,259,804, total asset 

$480,000,359, total liability $35,669,918; net sales $294,320,803, 

net income $11,590,395. 

8. Another example, in the last quarter report for quarterly period 

ended March 31, 2020, it stated, cash and cash equivalents 

$41,311,137, total asset $395,274,720, total liability$ 79,682,492; 

net sales $85,826,.689, net loss $50,222,309. Here CGA suddenly 

reported a huge loss. 

9. Basically, most of CGA's quarterly and annually are very 

attractive to me while the stock price had kept falling. Therefore, 

Plaintiff became skeptical. To verify the truth Plaintiff made two 

special trips to China. 

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10. First trip. Plaintiff was attending CGA's annual meeting in 

June 2018 and visiting CGA factories. Gufeng is CGA's main 

subsidiary. It is located in the suburb of Beijing. Before Plaintiff 

went to the annual meeting at CGA's headquarter office in Xi'an 

China, I requested CGA twice by emails for permission of site 

visiting to Gufeng factory. CGA did not respond my first request. 

Later, CGA responded to my 2nd email saying they would arrange 

me to visit their 2 subsidiaries, Jinong and Yuxing, in Xi'an area 

when attending the annual meeting. I did visit Jinong and Yuxing 

and found everything normal there. During the meeting, I asked 

defendant Li personally again for visiting Gufeng. Li told me the 

factory was in the maintenance now and it would resume normal 

production by end of June and He would arrange the site visit for 

me then. However, later in July when I requested for the real visit 

to Gufeng no one responded my email request. Plaintiff visited the 

site anyway but only viewing from outside of the factory. I stayed 

outside for 2 hours, seeing only 2 trucks waiting outside the factory 

for loading. Plaintiff thought the scheduled maintenance had not 

finished. 

1 I. Second trip. Between February and May 2019, plaintiff 

visited Gufeng factory personally without notifying defendants. 

Plaintiff also sent several other people to observe the factory. The 

most valuable information was from a local observer who was able 

to watch the factory everyday. Then Plaintiff got confirmation, all 

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the Financial data for Gufeng in the quarterly and annual reports 

officially filed with SEC are false intentionally for misleading 

purpose. 

12. Truth about Gufeng. According to recent 3 ofCGA annual 

reports, Gufeng sold approximately 309,882 metric tons of 

fertilizer products in 2017, 308,098 metric tons in 2018 and 

389,544 metric tons in 2019. Therefore, average yearly shipment 

out of Gufeng should be 339840 Metric tons. This number is only 

for finished products. To make the products, at least the same 

amount raw materials is needed. Therefore, 335,840 times 2, 

shipment in and out together should be 671,680 metric tons. If 300 

days are normal working days a year, the whole year amount 

671,680 divided by 300 days, 2,238 metric tons shipment should 

pass through the entrance of the factory. Supposed average load 

capacity of a truck is 3 0 metric tons, at least 7 5 trucks should enter 

the gate and 75 trucks exit the gate. However, the truth is during 

the last 2 years, average traffic in-out traffic has been less than 2 

trucks a day. Sometime, especially recent weeks, not even 5 trucks 

a week. According to a local observer. 

13. Gufeng is a main contributor of sales and income for CGA. 

According to last 3 years CGA annual reports: in 2017, the whole 

company net sales total: $285,213,040,Gufeng sales 

$104,446,239,account 37%; 2018 net sales total: $287,053,530, 

Gufeng sales $112,983,573,account 39%; 2019, net sales total: 

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$294,320,803, Gufeng $136,285,236, account 46%. So, on average 

Gufeng' s contribution to total sales is 41 % . As for the income, 

2017 the whole company operation income $31,977,771, Gufeng 

$8,286,761, account 26%; 2018 total operation income: 

$29,801,787, Gufeng $10,151,272, account 34%; In 2019, total 

operation income: $18,804,748,Gufeng $14,076,655 account 74%; 

Therefore, on average Gufeng contribution to income is 45%. 

Therefore, Gufeng' s financial data is very significant: if Gufeng' s 

data is fake, a logical reasoning will be that the whole financial 

reports are 100% fake. Furthermore, If recent 3 years data fake, it 

is very possible the data of previous years also fake. 

Plaintiff suffered seriously damages by the False financial 

statement 

14. Plaintiff started purchase of CGA stock from middle of 

December 2016,purely attracted by CGA's quarterly and annually 

reports filed with SEC. Plaintiffs holding volume grew rapidly 

mainly trapped by the fake data from beginning zero, added to over 

$1.5 million of shares in middle of 2018 when Plaintiff was 

attending CGA annual meeting. During the annual meeting, 

defendants showed me other 2 factories in Xi' an, Plaintiff still 

believe the CGA proxy materials and the stories defendants told 

were true, even though I viewed outside of Gufeng and only saw 2 

trucks there. So Plaintiff still did not reduce the investment with 

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CGA and keep the position level even when the stock price started 

sharply dropping. But finally Plaintiff became suspicious therefore 

went to China in second trip in February 2019 then found the 

truth. After Plaintiff confirmed that all CGA's financial statement 

were false, Plaintiff gradually reduced the holding. After CGA's 

last annual report came out October 15, 2019, I decide to expedite 

unloading CGA stock. Plaintiff only has about $7500 with 3000 

shares now. By trading CGA stock, Plaintiff suffered damages 

over $1.25 million as a result of the violations of the federal 

securities laws alleged herein. 

COUNT I 

For Violations of Section 1 O(b) of the Exchange Act and Rule 

1 Ob-5 Against All Defendants 

15. Plaintiff repeats and realleges each and every allegation 

contained above as if fully set forth herein. During the relevant 

period, Defendants carried out a plan, scheme, and course of 

conduct which was intended to and, throughout the relevant 

Period, did: (i) deceive the investing public, including Plaintiff as 

alleged herein; and (ii) cause Plaintiff to purchase CGA common 

stock at artificially inflated prices. Defendants: (i) employed 

devices, schemes, and artifices to defraud; (ii) made untrue 

statements of material fact and/or omitted to state material facts 

necessary to make the statements not misleading; and (iii) engaged 

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in acts, practices, and a course of business which operated as a 

fraud and deceit upon the purchasers of the Company's common 

stock in an effort to maintain artificially high market prices for 

CGA common stock in violation of Section 1 O(b) of the Exchange 

Act and Rule I Ob-5, promulgated thereunder. Defendants, 

individually and in concert, directly and indirectly, by the use, 

means or instrumentalities of interstate commerce and/or of the 

mails, engaged and participated in a continuous course of conduct 

to conceal adverse material information about the Company's 

financial well-being, operations, and prospects. During the relevant 

period, Defendants made the false statements specified above, 

which they knew or recklessly disregarded to be false and 

misleading in that they contained misrepresentations and failed to 

disclose material facts necessary in order to make the statements 

made, in light of the circumstances under which they were made, 

not misleading. Defendants had actual knowledge of the 

misrepresentations and omissions of material fact set forth herein, 

or recklessly disregarded the true facts that were available to them. 

Defendants engaged in this misconduct to conceal CGA true 

condition from the investing public and to support the artificially 

inflated prices of the Company's common stock. Plaintiff has 

suffered damages in that, in reliance on the integrity of the market, 

they paid artificially inflated prices for CGA common stock. 

Plaintiff would not have purchased the Company's common stock 

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at the prices they paid, or at all, had they been aware that the 

market prices for CGA' s common stock had been artificially 

inflated by Defendants' fraudulent course of conduct. As a direct 

and proximate result of Defendants' wrongful conduct, Plaintiff 

suffered damages in connection with their respective purchases of 

the Company's common stock during the relevant Period. By 

virtue of the foregoing, Defendants violated Section l0(b) of the 

Exchange Act and Rule l0b-5, promulgated thereunder. 

COUNTil 

For Violations of Section 20(a) of the Exchange Act Against the 

Individual Defendants 

16. Plaintiff repeats, incorporates, and realleges each and every 

allegation above as if fully set forth herein. The Individual 

Defendants acted as controlling persons of CGA within the 

meaning of Section 20(a) of the Exchange Act. By virtue of their 

high-level positions, participation in and/or awareness of the 

Company's operations, direct involvement in the day-today 

operations of the Company, and/or intimate knowledge of the 

Company's actual performance, and their power to control public 

statements about CGA, the Individual Defendants had the power 

and ability to control the actions of CGA and its employees. By 

reason of such conduct, the Individual Defendants are liable 

pursuant to Section 20(a) of the Exchange Act. 

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PRAYER FOR RELIEF 

17. WHEREFORE, Plaintiff prays for judgment as follows: 

18. Awarding compensatory damages in favor of Plaintiff against 

all Defendants, jointly and severally, for the damages of$1.25 

million or more I actually suffered as a result of Defendants' fraud; 

19. Awarding punitive damages of $500,000 or more permitted 

by law considering defendant committed Third Tier violation 

specified by SEC. 21B(b)(3) of Exchange ACT. 

20. Awarding pre-judgment interest, as well as reasonable 

attorneys' fees and other costs, as permitted by law; and 

21. Awarding such other and further relief as this Court may 

deem just and proper. 

JURY DEMAND 

22. Plaintiff demands a trial by jury. 

Dated: June 2, 2020 

12 

Respectfully submitted, 

Gang Chen 

5493 Antigua Circle 

Vero Beach, FL 32967 

Telephone: (610)247-7515 

Case 2:20-cv-14181-KAM Document 1 Entered on FLSD Docket 06/05/2020 Page 12 of 13
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