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Another Resignation for China MediaExpress

(China MediaExpress story updated from March 17.)

NEW YORK ( TheStreet) -- More details emerged in the China MediaExpress (CCME) brouhaha late Thursday when the company filed its form 8-K with the Securities and Exchange Commission, detailing the recent resignations of its auditor and CFO.

Beset by fraud allegations since January, China Media said in the filing that one of its key directors, Dorothy Dong, had also resigned.

Dong is a managing director and head of China investments at C.V. Starr Investment Advisors, the fund belonging to Maurice "Hank" Greenberg, which had acquired a large stake in China Media and was its biggest backer. Small investors who had bought China Media shares looked to Starr's 8.8% stake -- which must have resulted from stringent due diligence, the thinking went -- as a validation that the company was a legitimate and fast-growing enterprise.

A spokesman for Starr declined to comment.

>>China RTO Stocks Slide After China Media Bombshell

China Media's stock remains halted. Its former auditor, the Hong Kong affiliate of Deloitte, said in its resignation letter that it had "lost confidence in the representations of management (which underpin any audit)." The quote comes from Dong's resignation letter, in which she cited Deloitte's correspondence. Letters from both Dong and the outgoing CFO, Jacky Lam, were appended to China Media's 8-K filing. China Media didn't include the letter from Deloitte, choosing only to summarize its content in the 8-K filing itself.

According to China Media in the 8-K, "There were no disagreements between Ms. Dong and the Company that resulted in her resignation."

Except one thing: "Ms. Dong's resignation letter indicated that she disagreed with the conduct of the Company's management resulting in [Deloitte's] resignation and the resistance of the management to some protective measures that she and other independent directors proposed at a board meeting held on March 13."
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