China's Puda Coal said its auditor Moore Stephens has resigned, effective immediately and the auditor warned that audit reports for fiscal years 2009 and 2010 should no longer be relied upon.

The resignation and non reliance advice by Mr Moore Stephens are based on its conclusion that it is no longer able to rely on the representations of the company's management received in connection with its audits of the Company's financial statements for the last two fiscal years.

Mr Moore Stephens believes such management representations are materially inconsistent with the alleged unauthorized transfers of subsidiary ownership by the Company's Chairman, Mr Ming Zhao, which are currently subject to the investigation by the Audit Committee. The Company's Audit Committee will continue its investigation into the alleged unauthorized transactions.