NEW YORK ( TheStreet) -- The troubled Chinese reverse-merger company Fuqi International ( FUQI), long under investigation by the Securities and Exchange Commission, announced Friday that Nasdaq will likely delist its stock, demoting the equity to the Pink Sheets.

Fuqi has failed to file a financial report with the SEC since the September quarter of 2009. It had also been attempting to restate results for that quarter as well as the previous two.

A jewelry manufacturer based in Shenzhen, across the harbor from Hong Kong, Fuqi said it will likely miss the March 28 deadline Nasdaq had set for filing all its delinquent SEC financial reports through Dec. 31, 2010. The company cannot apply for another extension.

Despite its troubles, Fuqi said it expects to apply for a re-listing on Nasdaq "at such time as the Company is able to comply with all requirements for initial listing."

Fuqi came public in the U.S. through a reverse merger in 2006. A year later, it sold shares in a public offering and uplisted to Nasdaq.

Investigating Chinese Reverse Mergers

Several experienced Chinese reverse-merger hands were behind Fuqi. One of its chief promoters -- the facilitators who help private companies arrange reverse mergers -- was "Dexter" Heung Sang Fong.

Fong has also served as a director of Kandi Technologies ( KNDI), whose reverse merger was orchestrated by the U.S.-based stock promoter Paul Kelley, and a Diguang International Development ( DGNG), a reverse merger arranged by Richard Propper. A firm run by Propper's son, the sometime documentary producer Kerry Propper, was a co-underwriter of Fuqi's 2007 public offering. Kerry Propper's firm Chardan Capital Markets, also sponsored the special-purpose acquisition vehicle that would create A-Power Energy ( APWR), among others.

Also last week, trading was halted in several Chinese small-cap names, including China Intelligent Lighting ( CIL) and NIVS IntelliMedia ( NIV), whose auditor, Malone Bailey, resigned because of "what it characterized as illegal acts involving the Company's accounting records and bank statements and discrepancies in accounts receivable," the company said in a filing with the SEC on Friday. Malone Bailey also served as China Intelligent Lighting's audit firm.

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