San Diego, Dec. 15, 2011 (Shareholders Foundation) -- An investigation on behalf of investors in China Natural Gas, Inc. (NASDAQ:CHNG) shares over possible breaches of fiduciary duties by certain directors and officers at China Natural Gas was announced.

The investigation by a law firm focuses on possible shareholder claims based on potential breaches of fiduciary duties. Specifically the investigation concerns whether certain directors and officers at China Natural Gas, Inc. breached their fiduciary duties in connection with certain statements regarding China Natural Gas business, its prospects and its operations were materially false and misleading at the time they were made.

China Natural Gas, Inc. reported that is annual Revenue rose from $35.39million in 07 to $89.95million in 2010 and its Net Income increased over the same time periods from $9.12million to $17.22million.

Shares of China Natural Gas, Inc. (Public, NASDAQ:CHNG) fell from its highest trading of $13.70 on October 16, 2009 to $2.54 on June 10, 2011.

Then on June 30, 2011Mr. Qinan Ji, Chairman and Chief Executive Officer of China Natural Gas, Inc. (NASDAQ:CHNG) announced he has entered into an exclusivity agreement with a consortium backed by Themes Investment partners. Mr. Ji informed the special committee of the board of directors that he intends to work together with the consortium to formulate a proposal to acquire all of the outstanding shares of common stock of China Natural Gas that he and his affiliates do not already own at a proposed price of $4.25 per share in cash.
Mr. Ji, directly and indirectly, currently beneficially owns approximately 13.99% of China Natural Gas common stock.
Following the announcement shares of China Natural Gas (CHNG) rose from roughly $3.50 to $3.92 on June 30, 2011.
Since NASDAQ: CHNG shares continued to fall again and closed on September 20, 2011 at $1.93 per share when trading stopped.
On September 21, 2011, China Natural Gas announced that its Board of Directors has concluded that its unaudited interim financial statements for the three months ended March 31, 2010, its unaudited interim financial statements for the six months ended June 30, 2010, its unaudited interim financial statements for the nine months ended September 30, 2010, and its audited financial statements for the fiscal year ended December 31, 2010, should no longer be relied upon due to a failure to correctly disclose a transaction related to its Chief Executive Officer and Chairman of its Board of Directors or to benefit those related parties.

China Natural Gas said that its Board of Directors has concluded that a loan was made to parties related to its CEO and Chairman of the Board of Directors or to benefit those related parties, and that the nature of the Loan had not been properly disclosed to its Board of Directors and Audit Committee, its Independent Registered Public Accounting Firm at the time the Loan was made, and its current Independent Registered Public Accounting Firm at the time they were engaged as China Natural Gas new Independent Registered Public Accounting Firm in December 2010.

China Natural Gas also said that neither of the loans were reported to or approved by its Board of Directors.
On October 4, 2011, China Natural Gas said its Board of Directors appointed Mr. Shuwen Kang as its Chief Executive Officer and said that on the same date, Mr. Qinan Ji resigned as Chief Executive Officer of the Company at the request of the Board of Directors.

On November 9, 2011, China Natural Gas said it received a letter from The NASDAQ Stock Market LLC in which among other things its Staff stated that it has determined to delist China Natural Gas securities.