ShengdaTech Announces Receipt Of NASDAQ Delisting Notice And Resignation Of Acting CFO

SHANGHAI, April 29, 2011 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. (the "Company") (Nasdaq: SDTH) today announced that it received a letter on April 20, 2011 from the Listing Qualifications Department of The NASDAQ Stock Market LLC ("Nasdaq") stating that based on the review of public documents and information provided by the Company, Nasdaq determined the continued listing of the Company's securities on Nasdaq is no longer warranted.  The Nasdaq letter cited the following criteria as the reasons for the determination:

• public interest concerns under Nasdaq Listing Rule 5101 raised by the serious accounting and operational issues uncovered by KPMG, the Company's independent registered public accounting firm; the deliberate and ongoing efforts of the Company's management to obstruct an internal investigation into these matters; the Company's failure to promptly disclose material information related to that investigation; and the Company's violation of the rules setting forth the responsibilities and authority of the Audit Committee;

• the Company's failure to make prompt public disclosure of material developments relating to the investigation, as required by Nasdaq Listing Rule 5250(b)(1) and IM-5250-1;

• the Company's violations of Nasdaq Listing Rule 5605(c)(3) and IM-5605 as well as the statutory responsibilities and authority of the Audit Committee set forth in Section 10A(m)(2) of the Securities and Exchange Act of 1934 caused by the obstructive conduct of the Company's executive management and failure to provide for payment of the advisors engaged to assist with the internal investigation; and

• the Company's failures to timely file with the Securities and Exchange Commission its Annual Report on Form 10-K for the period ended December 31, 2010, as required by Nasdaq Listing Rule 5250(c)(1), and to present a definitive plan that demonstrates its ability to regain compliance within the time period permitted under Nasdaq's Listing Rules.

The Company requested an appeal of this determination by submitting a hearing request to the Hearings Department of Nasdaq and a hearing has been set for May 26, 2011. The delisting action is stayed pending the outcome of the hearing.

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