XML 55 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Related Party Transactions
 12 Months Ended
Dec. 31, 2011
Related Party Transactions

(8) Related Party Transactions

 

Mr. Zhenyong Liu is the director, principal stockholder and chief executive officer of the Company.  He loaned money to HBOP for working capital purposes over a period of time.  On August 31, 2009, Orient Paper, HBOP, and Mr. Liu entered into a tri-party Debt Assignment and Assumption Agreement, under which Orient Paper agreed to assume the loan of $4,000,000 due from HBOP to Mr. Liu.  Concurrently, Orient Paper issued 1,204,341 shares of restricted common stock to Mr. Liu at the market price of $3.32132 per share.  As of December 31, 2011 and 2010, net amount due to Mr. Liu were $2,299,312 and $2,209,068, respectively.  

 

The loan of Mr. Liu is interest bearing and the interest rate is equal to the rate established by the People’s Bank of China, which was 5.85% and 5.85% per annum as of December 31, 2011 and 2010.  The term is for 3 years and starts from January 1, 2010 and is due December 31, 2012.

 

On August 1 and August 5, 2008, two members of the Board of Directors of HBOP loaned money to the Company for working capital purposes.  The amounts owed bear interest equals the rate established by the People’s bank of China and are due on July 31 and August 4, 2011, respectively.  As of December 31, 2010, the total loan amount payable was $2,041,804.  The Company paid off the loan balance to both directors of HBOP by August 4, 2011. The interest rate for the year ended December 31, 2011, 2010 and 2009 was 5.85%, 5.85% and 5.40% per annum, respectively.

 

The interest expenses incurred for above related party loans are $203,914, $242,552 and $106,565 for the years ended December 31, 2011, 2010 and 2009.

 

On February 5, 2010, the Company borrowed $200,000 from a shareholder to pay for various expenses incurred in the U.S. The amount is repayable on demand with interest free. The Company repaid the entire balance on April 14, 2010.

 

On November 30, 2011, the Company borrowed $200,000 from a shareholder to pay for various expenses incurred in the U.S. The amount is repayable on demand with interest free. The Company repaid the entire balance on January 4, 2012.