Shapiro Haber & Urmy LLP has filed a class action alleging securities fraud in the United States District Court for the District of Delaware against China Natural Gas, Inc., and certain of its officers and directors. The case was filed on behalf of all purchasers of the common stock of China Natural Gas during the period from March 10, 2010 through August 19, 2010 (the "Class Period"). The case is entitled Vandevelde v. China Natural Gas, Inc., C.A. No. 1:10-cv-00728-SLR.

If you purchased China Natural Gas common stock during the Class Period, and you suffered damages, you may move the court to appoint you as lead plaintiff no later than 60 days from today.

The Complaint alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading public statements in its Annual Report for the year ended December 31, 2009 and its Quarterly Report for the quarter ended March 31, 2010, specifically that the defendants failed to disclose and properly account for a $17.7 million loan it had entered on February 26, 2010 ("the Bank Loan"). The Complaint further alleges that the defendants failed to disclose that the Bank Loan violated an Indenture for senior notes and warrants of the Company, placing China Natural Gas in default under the Indenture. As a result of the Bank Loan and the resulting default under the Indenture, China Natural Gas was required to reclassify approximately $45 million in long term liabilities to short term liabilities, increasing the company's short term liabilities as originally reported by over 700% and increasing the company's short term liabilities as originally reported by over 600%.

On August 13, 2010, after the close of the market, China Natural Gas disclosed that the company would be amending its annual and quarterly reports because of its failure to disclose the Bank Loan and the resulting need to reclassify certain long term liabilities to short term liabilities. On August 19, 2010, China Natural Gas filed a Form 8-K in which it disclosed that its prior financial statements should not be relied upon. The Complaint alleges that Plaintiff and other Class members were damaged because they purchased stock at artificially inflated prices during the Class Period as a result of the defendants' fraudulent conduct.

The factual and legal bases for the Plaintiffs' claims are set forth in greater detail in the Complaint. A copy of the Complaint can be obtained from the office of the Clerk of the United States District Court for the District of Delaware, 844 N. King Street, Unit 18, Wilmington, DE 19801, (302) 573-6170. A copy of the Complaint can also be obtained, without any obligation, from counsel for the plaintiff, Shapiro Haber & Urmy LLP, 53 State Street, Boston, MA 02109, (800) 287-8119 or (617) 439-3939, cases@shulaw.com. More information about the law firm of Shapiro Haber & Urmy LLP and its qualifications is available on the firm's website at www.shulaw.com.