8-K/A 1 f8k033113a1_chinacarbon.htm CURRENT REPORT AMENDMENT f8k033113a1_chinacarbon.htm

Washington, D.C. 20549

Amendment No. 1


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 31, 2013

(Exact name of Company as specified in its charter)
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
c/o XingheYongle Carbon Co., Ltd.
787 XichengWai
Xinghe County
Inner Mongolia, China
(Address of principal executive offices) (Zip Code)

(86) 474-7209723
Company’s telephone number, including area code

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.01 Changes in Registrant's Certifying Accountant.

Dismissal of  Independent Registered Public Accounting Firm

On March 31, 2013, China Carbon Graphite Group, Inc. (the “Company”) dismissed its independent registered public accounting firm, BDO China Dahua CPA Co., Ltd. (“BDO China Dahua”).

The reports of BDO China Dahua on the consolidated financial statements of the Company as of December 31, 2011 and 2010 and for the years then ended did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

The decision to change independent registered public accounting firm was approved by the Audit Committee of the Board of Directors of the Company.

(a) During the process of auditing of the Company’s consolidated statements for the year ended December 31, 2012, the Company and BDO China Dahua disagreed with the amount of adequate audit evidence needed to support the Company’s year-end accounts to meet the requirements of BDO China Dahua; (b) the Board of Directors of the Company discussed these disagreement with BDO China Dahua; and (c) the Board of Directors of the Company has authorized BDO China Dahua to respond fully to inquiries of the successor independent registered public accounting firm concerning this matter.
The disagreement between the Company and BDO was as follows:
The Company and BDO did not agree on the Company's ability to continue as a going concern. BDO believed there were negative financial indicators showing that the Company has a going concern issue, such as the over reliance on certain bank loans, the pileup of inventory, and the decrease of revenues due to the weak demand of its steel clients.  The Company's management did not agree with this assessment.  We believe that under the contrary macroeconomic condition in China, most companies in this capital intensive industry have similar financial indicators as identified by BDO, but do not have a going concern issue.  The company believes that despite the slower inventory turnover, it could continue to sell its inventories to generate sufficient working capital to support the Company’s operation for the next twelve months.
There were no “reportable events” as described in Item 304(a)(1)(v) of Regulation S-K other than: At December 31, 2011, the Company reported a material weakness in its internal control over financial reporting related to: (i) lack of entity level controls establishing a “tone at the top”, including but not limited to, communication between committee members and senior management regarding corporate decisions and planning; (ii) insufficient knowledge of accounting and financial reporting with respect to the requirements and application of both U.S. GAAP and SEC guidelines; (iii) an inadequate amount of review by management of the financial statement reporting process, including understanding and reporting all required disclosures necessary, by those in charge of corporate governance; (iv) lack of corporate governance policies in place, such as an internal audit function, fraud and risk assessment policies and a whistleblower policy; and (v) inadequate segregation of duties over certain information system access controls.

On March 31, 2013, the Company provided BDO China Dahua with a copy of this Current Report on Form 8-K and requested that BDO China Dahua furnish the Company with a letter addressed to the United States Securities and Exchange Commission stating whether BDO China Dahua agrees with the above statements.  A copy of such letter is attached as Exhibit 16.1 to this Current Report on Form 8-K.

Section 9. Financial Statements and Exhibits.
(d)           Exhibits
Exhibit No.
Letter from BDO China Li Xin Da Hua CPA Co., Ltd. to the SEC.*
* To be filed by amendment.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
China Carbon Graphite Group, Inc.
Date: April 12, 2013
/s/ Donghai Yu
Donghai Yu, Chief Executive Officer, President and Director