UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

THOMAS ROSENBERGER, on behalf of Case No

„

himself and all others similarly situated,

//if/

CLASS ACTIONPlaintiff,

vs. CLASS ACTION COMPLAINT FORVIOLATIONS OF FEDERAL

PUDA COAL, INC., LIPING ZHU, QIONG SECURITIES LAWSWU, and MING ZHAO,

Defendants. JURY TRIAL DEMANDED

Thomas Rosenberger ("Plaintiff'), by his attorneys, on behalf of himself and all others

similarly situated, alleges the following based upon the investigation of plaintiff's counsel,

except as to allegations specifically pertaining to plaintiff, which are based on personal

knowledge. The investigation of counsel included, among other things, a review of Puda Coal

Inc's ("Puda Coal" or the "Company") public filings with the United States Securities and

Exchange Commission ("SEC"), press releases issued by the Company, media, and news reports

about the Company, and other publicly available data, including, but not limited to, publicly

available trading data relating to the price and trading volume of Puda Coal common stock and

analyst reports.

1. This action is a securities action brought under Sections 10(b) and 20(a) of the

Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder

by the SEC, and under Sections 11 and 15 of the Securities Act of 1933 (the "Securities Act") by

Plaintiff on behalf of a class of all persons and entities who purchased the common stock of Puda

Coal between September 15, 2009 and April 8, 2011, inclusive (the "Class Period") to recover

damages caused to the Class by defendants' violations of the securities laws.

2. The Company describes itself as a supplier of premium high grade cleaned coking

coal used to produce coke for steel manufacturing in the People's Republic of China (the

"PRC"). In the Company's most recent annual report filed on Form 10-K for the year ending

December 31, 2010 ("2010 10-K"), the Company states that within its core Coal Washing

Business, Puda Coal's operations are "conducted exclusively by an entity in China, Shanxi Puda

Coal group Co., Ltd ("Shanxi Coal").

3. Throughout the Class Period, the Company reported revenues and earnings, but

failed to disclose that there were improper transfers of core Company assets, most notably the

transfer of ownership of Shanxi Coal, by its Chairman of the Board, Mr. Ming Zhao ("Zhao"), to

himself such that Puda Coal's assets and value was in reality materially less than disclosed to its

investors.

4. During the Class Period, the Company's stock materially increased based on the

Defendants' positive statements about the Company's prospects, reaching a 52-week high of

$16.97 per share on December 2, 2010. The Company took advantage of the artificially inflated

stock price by selling 9,000,000 shares of common stock on December 8, 2010 at the artificially

inflated price of $12 per share.

5. On April 8, 2011, the first disclosures of wrongful transfers of ownership of

Company assets to Chairman Zhao emerged in a publicly circulated news article entitled "Puda

Coal Chairman Secretly Sold Half The Company and Pledged The Other Half To Chinese PE

Investors". Following the circulation of this article, on April 8, 2011, Puda Coal announced in a

press release that it was currently reviewing the allegations regarding improper share transactions

by Chairman Zhao.

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6. The material facts adversely affecting the Company were not fully disclosed until

April 11, 2011, when, before the opening of trading, Puda Coal issued a press release that stated,

in part, the following:

Puda Coal Commences Investigation

TAIYUAN, SHANXI PROVINCE, China, April 11, 2011 — Puda Coal, Inc.(NYSE AMEX: PUDA) ("Puda Coal" or the "Company) today announced that itsBoard of Directors has unanimously ratified the Audit Committee's decision tolaunch a full investigation into the allegations raised in a recent article allegingvarious unauthorized transactions in the shares of a subsidiary company, ShanxiCoal. The Audit Committee has retained professionals in the United States andChina to assist it in its investigation. The full board, including Mr. Ming Zhao, theChairman of Puda Coal, has agreed to cooperate in the investigation.

Although the investigation is in its preliminary stages, evidence supports theallegation that there were transfers by Mr. Zhao in subsidiary ownership that wereinconsistent with disclosure made by the Company in its public securities filings.Mr. Zhao has agreed to a voluntarily leave of absence as Chairman of the Boardof the Company until the investigation is complete. The New York StockExchange has halted trading in the Company's stock.

7. Since the April 11, 2011 disclosure, Puda Coal's stock continues to be halted by

the New York Stock Exchange rendering it effectively worthless to its shareholders who are

unable to sell the Company's stock.

JURISDICTION AND VENUE

8. The claims asserted arise under Sections 10(b) and 20(a) of the Exchange Act and

Rule 10b-5 promulgated thereunder and under Sections 11 and 15 of the Securities Act.

Jurisdiction is conferred by Section 27 of the Exchange Act and Section 22 of the Securities Act.

Venue is proper as defendant Puda Coal's common stock trades on the NYSE Amex in this

District and the underwriters of Puda Coal's December 8, 2010 secondary common stock

offering, Macquarie Capital (USA) Inc. and Brean Murray, Carret & Co., LLC, have offices in

this District.

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III. THE PARTIES

9. Plaintiff purchased Puda Coal common stock as detailed in the certification

attached hereto and was damaged thereby.

10. Defendant Puda Coal is a Delaware corporation and has its headquarters in

Taiyuan, Shanxi Province, China at 426 Xuefu Street, Taiyuan, Shanxi Province, The People's

Republic of China.

11. Defendant Ming Zhao ("Zhao") is a co-founder of the Company and has been the

Chairman of the Board of Directors at all relevant times. Pursuant to the Company's April 11,

2011 press release, defendant Zhao is currently taking a leave of absence until Puda Coal's

investigation is complete. Among other things, Zhao signed the Company's annual report filed

on March 31, 2010 with the Securities and Exchange Commission ("SEC") on Form 10-K for the

year ended December 31, 2009 ("2009 10-K") and annual report filed on March 16, 2011 with

the SEC for the year ended December 31, 2010 ("2010 10-K").

12. Defendant Liping Zhu ("Zhu") has been the President and Chief Executive

Officer at all relevant times. Among other things, Zhu signed the Company's 2009 10-K, 2010

10-K, quarterly report for the third quarter ended September 30, 2009 filed on November 13,

2009 on Form 10-Q ("Q3 2009 10-Q"), quarterly report for the first quarter ended March 31,

2010 filed on May 17, 2010 on Form 10-Q ("Q1 2010 10-Q"), quarterly report for the second

quarter ended June 30, 2010 filed on August 16, 2010 on Form 10-Q ("Q2 2010 10-Q"), and

quarterly report for the third quarter ended September 30, 2010 filed on November 15, 2010 on

Form 10-Q ("Q3 2010 10-Q").

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13. Defendant Qiong Wu ("Wu") has been the Company's Chief Financial Officer at

all relevant times. Among other things, Wu signed the Company's 2009 10-K and 2010 10-K

during the Class Period.

14. The individuals named as defendants in 'Ill 11 - 13 are referred to herein as the

"Individual Defendants". The Individual Defendants, because of their positions with the

Company, possessed the power and authority to control the contents of Puda Coal's press

releases and presentations to securities analysts, money and portfolio managers and institutional

investors, i.e., the market. Each defendant was provided with copies of the Company's press

releases alleged herein to be misleading prior to or shortly after their issuance and had the ability

and opportunity to prevent their issuance or cause them to be corrected. Because of their

positions and access to material non-public information available to them but not to the public,

each of these defendants knew that the adverse facts specified herein had not been disclosed to

and were being concealed from the public and that the positive representations which were being

made were then materially false and misleading.

IV. CLASS ACTION ALLEGATIONS

15. Plaintiff brings this action as a class action pursuant to Federal Rules of Civil

Procedure 23(a) and 23(b)(3) on behalf of a class of all persons and entities who purchased the

publicly traded common stock of Puda Coal between September 15, 2009 and April 10, 2011,

inclusive, including persons or entities who purchased Puda Coal's common stock pursuant

and/or traceable to the Company's materially false and misleading registration statement and

prospectus supplement dated December 8, 2010 (the "Class").

16. The members of the Class are so numerous that joinder of all members is

impracticable. While the exact number of Class members is unknown to plaintiff at the present

5

time and can only be ascertained through appropriate discovery, plaintiff believes that there are

hundreds of members of the Class located throughout the United States. As of March 7, 2011,

Puda Coal had over 30 million shares of common stock outstanding.

17. Plaintiff's claims are typical of the claims of the members of the Class. Plaintiff

and all members of the Class have sustained damages because of defendants' unlawful activities

alleged herein. Plaintiff has retained counsel competent and experienced in class and securities

litigation and intends to pursue this action vigorously. The interests of the Class will be fairly

and adequately protected by plaintiff. Plaintiff has no interests which are contrary to or in

conflict with those of the Class that plaintiff seeks to represent.

18. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy. Plaintiff knows of no difficulty to be encountered in the

management of this action that would preclude its maintenance as a class action.

19. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by defendants' acts and

omissions as alleged herein;

(b) whether defendants misstated and/or omitted to state material facts in their public

statements and filings with the SEC;

(c) whether defendants participated directly or indirectly in the course of conduct

complained of herein; and

(d) whether the members of the Class have sustained damages and the proper

measure of such damages.

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V. FALSE AND MISLEADING STATEMENTS

20. On September 15, 2009, the Company issued a press release concerning its

application for listing on the NYSE Amex LLC ("NYSE Amex") in which it stated, in part as

follows:

On September 15, 2009, the Board of Directors of Puda Coal, Inc. (the"Company") amended and restated the Company's Audit Committee Charter tobe in compliance with the requirements of the NYSE Amex LLC (the"Exchange") in connection with its application for listing on the Exchange. TheAmended and Restated Audit Committee Charter is attached hereto as Exhibit 3.1and incorporated herein by reference. . . .

On September 15, 2009, the Board of the Company also adopted a Code ofBusiness Conduct and Ethics in order to be in compliance with the requirementsof the Exchange. The Code is attached hereto as Exhibit 3.2 and incorporatedherein by reference.

21. The Puda Coal Code of Business Conduct and Ethics attached to the September

15, 2009 press release states, in pertinent part, that

Conflicts of Interest

The Company recognizes and respects the right of its directors, officers andemployees to engage in outside activities which they may deem proper anddesirable, provided that these activities do not impair or interfere with theperformance of their duties to the Company or their ability to act in theCompany's best interests. In most, if not all, cases this will mean that ourdirectors, officers and employees must avoid situations that present a potential oractual conflict between their personal interests and the Company's interests.

A "conflict of interest" occurs when a director's, officer's or employee's personalinterest interferes with the Company's interests. Conflicts of interest may arise inmany situations. For example, conflicts of interest can arise when a director,officer or employee takes an action or has an outside interest, responsibility orobligation that may make it difficult for him or her to perform the responsibilitiesof his or her position objectively and/or effectively in the Company's bestinterests. Conflicts of interest may also occur when a director, officer oremployee or his or her immediate family member receives some personal benefit(whether improper or not) as a result of the director's, officer's or employee'sposition with the Company. Each individual's situation is different and inevaluating his or her own situation, a director, officer or employee will have toconsider many factors.

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Any transaction or relationship that reasonably could be expected to give rise to aconflict of interest should be reported promptly to the Compliance Officer. TheCompliance Officer may notify the Board of Directors or a committee thereof ashe or she deems appropriate. Actual or potential conflicts of interest involving adirector or officer should be disclosed directly to the Chairman of the Board ofDirectors.

Compliance with Laws, Rules and Regulations

The Company seeks to conduct its business in compliance with both the letter andthe spirit of applicable laws, rules and regulations. No director, officer oremployee shall engage in any unlawful activity in conducting the Company'sbusiness or in performing his or her day-to-day company duties, nor shall anydirector, officer or employee instruct others to do so.

Protection and Proper Use of the Company's Assets

Loss, theft and misuse of the Company's assets has a direct impact on theCompany's business and its profitability. Employees, officers and directors areexpected to protect the Company's assets that are entrusted to them and to protectthe Company's assets in general. Employees, officers and directors are alsoexpected to take steps to ensure that the Company's assets are used only forlegitimate business purposes. [Emphasis in original].

22. On September 18, 2009, the Company issued a press release announcing that

Puda Coal's common stock was approved to begin trading on the NYSE Amex on September 22,

2009:

Puda Coal expects to begin trading on NYSE Amex on Tuesday, September 22,2009, until which time its shares will continue to trade on the Over-The-Counter(OTC) Bulletin Board. . . .

"We are very pleased to soon begin our next phase as a public company bymoving our stock listing from OTC Bulletin Board to NYSE Amex," said Mr.Lining Zhu, President and CEO of Puda Coal, Inc. "We are honored to join theNYSE group of companies, and this milestone represents our continuous efforts toraise our profile within the investment community, improve our stock's liquidity,expand our transparency and enhance our corporate governance."

23. On November 13, 2009, the Company issued a press release concerning its

financial results for the third quarter ended September 30, 2009. Among other things, the

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Company reported net revenue of $56.1 million, gross profit of $5.4 million, operating income of

$4.0 million and a net loss of $0.6 million, or $0.04 per fully diluted share for the third quarter of

2009. Additionally, the Company made the following statements regarding Shanxi Coal:

Recent Events

On September 30, 2009, the Shanxi provincial government appointed Puda Coal'ssubsidiary Shanxi Puda Coal Group Co., Ltd as a consolidator of eight coal minesin Yucheng City, Pinglu County, The Company has commenced the technicalgeological prospecting process for the targeted coal reserves and the Companywill also perform a comprehensive financial analysis of the project and thendetermine the most efficient plan to develop and construct the targetedconsolidated coal mines. The eight mines will be consolidated into five,expanding the total area of the coal mines by 94.5% to 35.6 square kilometers,increasing coal reserves by 232.8% to 163.9 million metric tons and improvingcoal mine production capacity by 118.2% to 3.6 million metric tons.

24. On November 13, 2009, Defendants caused the Company to file its Q3 2009 10-Q

for the quarter ended September 30, 2009 with the SEC. The Q3 2009 10-Q, which was signed

by Defendant Zhu, stated, in part, the following:

As of September 30, 2009, the percentages owned by Mr. Ming Zhao and Mr.Yao Zhao in the Group companies are as follows:

Puda Coal, Inc.: Mr. Ming Zhao (approximately 49%); Mr. Yao Zhao(approximately 12%) held directly.

Puda Investment Holding Limited: Mr. Ming Zhao (approximately 49%);Mr. Yao Zhao (approximately 12%) held indirectly through Puda.

Shanxi Putai Resources Limited: Mr. Ming Zhao (approximately 49%);Mr. Yao Zhao (approximately 12%) held indirectly through Puda andBVI.

Shanxi Puda Coal Group Co., Ltd.: Mr. Ming Zhao (8%); Mr. Yao Zhao(2%) held directly, Mr. Ming Zhao (approximately 44%); Mr. Yao Zhao(approximately 11%) held indirectly through Puda, BVI and Putai.

After the above reorganization and as of September 30, 2009, the organizationalstructure of the Group is as follows:

9

Puda Coal, Inc."Puda" 100%

Puda Investment Ming Zhao (8%)Holding Limited and

"BVI" Yao Zhao (2%) 100%

Shanxi Putai Resources Limited 90% Shanxi Puda Coal Group Co., Ltd."Putai" "Shanxi Coal"

25. The Q3 2009 10-Q also includes the following statement:

The accompanying unaudited consolidated financial statements as of September30, 2009 and for the three and nine month periods ended September 30, 2009 and2008 have been prepared in accordance with generally accepted accountingprinciples for interim financial information and with the instructions to Form 10-Q and of Regulation S-X.

26. The Q3 2009 10-Q includes certifications pursuant to the Sarbanes-Oxley Act of

2002 ("Sarbanes-Oxley") Section 302, signed by Defendants Zhu and Wu, which represented as

follows:

1. I have reviewed this Quarterly Report on Form 10-Q of Puda Coal, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financialinformation included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:

a) Designed such disclosure controls and procedures, or caused suchdisclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those

10

entities, particularly during the period in which this report is beingprepared;

b) Designed such internal control over financial reporting, or causedsuch internal control over financial reporting to be designated under oursupervision, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controlsand procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end ofthe period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internalcontrol over financial reporting that occurred during the registrant's mostrecent fiscal quarter that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting;and

5. The registrant's other certifying officer and I have disclosed, based on our mostrecent evaluation of internal control over financial reporting, to the registrant'sauditors and the audit committee of registrant's board of directors (or personsperforming the equivalent functions):

a) All significant deficiencies and material weaknesses in the designor operation of internal controls over financial reporting which arereasonably likely to adversely affect the registrant's ability to record,process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management orother employees who have a significant role in the registrant's internalcontrol over financial reporting.

27. On February 16, 2010, the Company filed a Prospectus Supplement with the SEC

on Form 424(b)(2) in connection with the public offering of 3,284,000 shares of Puda Coal

common stock including the underwriters option to purchase additional shares. The offering was

priced at $4.75 per share and raised net proceeds of about $14.6 million. The Prospectus

Supplement, among other things, incorporates by reference the Q3 2009 10-Q. The Prospectus

Supplement, which was issued pursuant to a Registration Statement filed with the SEC on Form

11

S-3 dated February 12, 2010 signed by Defendants Zhu, Wu, and Zhao, among others, stated, in

part, the following:

Puda Coal, Inc. ("Puda" or the "Company") is a supplier of high-grademetallurgical coking coal to the industrial sector of the People's Republic ofChina. Its processed coking coal is primarily purchased by coke and steelproducers for the purpose of making the coke required for the steel manufacturingprocess. Its operations are conducted exclusively by an entity in China, ShanxiPuda Coal Group Col., Ltd. ("Shanxi Coal"), which it controls through 90%indirect equity ownership.

28. On March 24, 2010, the Company issued a press release concerning its financial

results for the fourth quarter and year ended December 31, 2009. Among other things, the

Company reported revenue of $60.2 million, gross profit of $5.3 million, operating income of

$4.9 million and net income of $2.3 million, or $0.14 per fully diluted share for the fourth

quarter.

29. On March 31, 2010, Defendants caused the Company to file its 2009 10-K for the

year ended December 31, 2009 with the SEC. The 2009 10-K, which was signed by Defendants

Zhu, Wu, and Zhao, among others, included certifications pursuant to the Sarbanes-Oxley

Section 302 of Defendants Zhu and Wu substantially the same as above in 1- 26, and stated, in

part, the following:

We are a supplier of high-grade metallurgical coking coal to the industrial sectorin the People's Republic of China (the "PRC" or "China"). Our processed cokingcoal is primarily purchased by coke and steel producers for the purpose of makingthe coke required for the steel manufacturing process. Our operations areconducted exclusively by an entity in China, Shanxi Puda Coal Group Co., Ltd("Shanxi Coal"), which we control through 90% indirect equity ownership.

30. The 2009 10-K also includes the following statement:

The discussion and analysis of Puda's financial condition and results ofoperations is based upon Puda's consolidated financial statements which havebeen prepared in accordance with accounting principles generally accepted in theUnited States.

12

31. On May 13, 2010, the Company issued a press release concerning its financial

results for the first quarter ended March 31, 2010. Among other things, the Company reported

revenue of $62 million, gross profit of $10.3 million, operating income of $9.1 million and net

income of $5.4 million, or $0.31 per fully diluted share for the first quarter. Additionally, the

Company made the following statements regarding Shanxi Coal:

As part of the Shanxi provincial government's policies to consolidate andredevelop the coal mining industry, new guidelines were enacted by thegovernment in February 2010 to require the registered capital of coal mineconsolidators to be at least RMB200 million (US$29.3 million). The currentregistered capital of Shanxi Coal is RMB22.5 million (about US$3.3million). Since Shanxi Coal has been previously approved as an acquirer andconsolidator of two coal mine projects, Shanxi Coal plans to increase itsregistered capital to RMB500 million (US$73.2 million), 90% of which (i.e.,RMB430 million) will be funded by Shanxi Coal's 90% shareholder, Putai, and10% of which (i.e., RMB48 million) will be funded by Shanxi Coal's 10%shareholder, Mr. Ming Zhao and his brother, Mr. Yao Zhao. The loan will be usedto pay for the increase of the registered capital of Putai's 90% subsidiary, ShanxiPuda Coal Group Co., Ltd. ("Shanxi Coal").

32. On May 17, 2010, Defendants caused the Company to file its Q1 2010 10-Q for

the first quarter ended March 31, 2010 with the SEC. The Ql 2010 10-Q, which was signed by

Defendant Zhu, included certifications pursuant to the Sarbanes-Oxley Section 302 substantially

the same as above in 1126 of Defendants Zhu and Wu, and stated, in part, the following:

As of March 31, 2010, the percentages owned by Mr. Ming Zhao and Mr. YaoZhao in the companies are as follows:

Puda Coal, Inc.: Mr. Ming Zhao (approximately 39%); Mr. Yao Zhao(approximately 10%) held directly.

Puda Investment Holding Limited: Mr. Ming Zhao (approximately 39%);Mr. Yao Zhao (approximately 10%) held indirectly through Puda.

Shanxi Putai Resources Limited: Mr. Ming Zhao (approximately 39%);Mr. Yao Zhao (approximately 10%) held indirectly through Puda andBVI.

13

Shanxi Puda Coal Group Co., Ltd.: Mr. Ming Zhao (8%); Mr. Yao Zhao(2%) held directly, Mr. Ming Zhao (approximately 35%); Mr. Yao Zhao(approximately 9%) held indirectly through Puda, BVI and Putai.

After the above reorganization and as of March 31, 2010, the organizationalstructure is as follows:

Puda Coal, Inc."Puda" 100%

Puda Investment Ming Zhao (8%)Holding Limited and

"BVI" Yao Zhao (2%) 100%

Shanxi Putai Resources Limited 90% Shanxi Puda Coal Group Co., Ltd."Putai" "Shanxi Coal"

33. The Q1 2010 10-Q also includes the following statement:

The accompanying unaudited consolidated financial statements as ofMarch 31, 2010 and 2009 have been prepared in accordance withgenerally accepted accounting principles for interim financial informationand with the instructions to Form 10-Q and of Regulation S-X.

34. On August 16, 2010, the Company issued a press release concerning its financial

results for the second quarter ended June 30, 2010. Among other things, the Company reported

revenue of $82.3 million, gross profit of $12.1 million, operating income of $10.4 million and

adjusted net income of $7.3 million, or $0.36 per fully diluted share for the second quarter.

35. On August 16, 2010, Defendants caused the Company to file its Q2 2010 10-Q for

the second quarter ended June 30, 2010 with the SEC. The Q2 2010 10-Q, which was signed by

Defendant Zhu, included certifications pursuant to the Sarbanes-Oxley Section 302 substantially

the same as above in If 26 of Defendants Zhu and Wu, and stated, in part, the following:

As of June 30, 2010, the percentages owned by Mr. Ming Zhao and Mr. Yao Zhao in thecompanies are as follows:

Puda Coal, Inc.: Mr. Ming Zhao (approximately 37%); Mr. Yao Zhao(approximately 9%) held directly.

14

Puda Investment Holding Limited: Mr. Ming Zhao (approximately 37%);Mr. Yao Zhao (approximately 9%) held indirectly through Puda.

Shanxi Putai Resources Limited: Mr. Ming Zhao (approximately 37%);Mr. Yao Zhao (approximately 9%) held indirectly through Puda and BVI.

Shanxi Puda Coal Group Co., Ltd.: Mr. Ming Zhao (10%) held directly,Mr. Ming Zhao (approximately 33%) held indirectly through Puda, BVIand Putai.

After the above reorganization and as of June 30, 2010, the organizationalstructure is as follows:

Rada Coat. Inc.'-Pucla"

1012,,Pu1a D.r.-er,t2nentHo:din!? Ltrattecl Mr Mins' Zhao, (10%)

3 Vi 100'0

p utai P.ource Shanxi Puda Group Cot,Limited tj

"Stianxi C: oar

36. The Q2 2010 10-Q also includes the following statement:

The accompanying unaudited consolidated financial statements as of June30, 2010 and 2009 have been prepared in accordance with generallyaccepted accounting principles for interim financial information and withthe instructions to Form 10-Q and of Regulation S-X.

37. On November 15, 2010, the Company issued a press release concerning its

financial results for the third quarter ended September 30, 2010. Among other things, the

Company reported revenue of $90 million, gross profit of $9.6 million, operating income of $7.9

million and adjusted net income of $5.0 million, or $0.25 per diluted share for the second

quarter.

38. On November 15, 2010, Defendants caused the Company to file its Q3 2010 10-Q

for the third quarter ended June 30, 2010 with the SEC. The Q3 2010 10-Q, which was signed

by Defendant Zhu, included certifications pursuant to the Sarbanes-Oxley Section 302

15

substantially the same as above in 26 of Defendants Zhu and Wu, and stated, in part, the

following:

As of September 30, 2010, the percentages owned by Mr. Ming Zhao and Mr.Yao Zhao in the companies are as follows:

Puda Coal, Inc.: Mr. Ming Zhao (approximately 37%); Mr. Yao Zhao(approximately 9%) held directly.

Puda Investment Holding Limited: Mr. Ming Zhao (approximately 37%);Mr. Yao Zhao (approximately 9%) held indirectly through Puda.

Shanxi Putai Resources Limited: Mr. Ming Zhao (approximately 37%);Mr. Yao Zhao (approximately 9%) held indirectly through Puda and BVI.

Shanxi Puda Coal Group Co., Ltd.: Mr. Ming Zhao (10%) held directly,Mr. Ming Zhao (approximately 33%) held indirectly through Puda, BVIand Putai.

After the above reorganization and as of September 30, 2010, the organizationalstructure is as follows:

Puda Coat. Inc."P.JcIa.

Pu::aT united lr. Mi:rs, Zhao (1 i))VI : 1::);)c

?:tai Resources Shauxi Pucia Coal Group Co,Ltd.

"Putai C:oar

39. The Q3 2010 10-Q also includes the following statement:

The accompanying unaudited consolidated financial statements as of September30, 2010 and for the three and none month periods ended September 30, 2010 and2009 have been prepared in accordance with generally accepted accountingprinciples for interim financial information and with the instructions to Form 10-Q and of Regulation S-X.

40. On December 8, 2010, the Company filed a Prospectus Supplement with the SEC

on Form 424(b)(5) in connection with the public offering of 9,000,000 shares of Puda Coal

16

common stock, including the underwriters option to purchase additional shares. The offering

was priced at $12 per share raising net proceeds of about $101.5 million. The Prospectus

Supplement incorporates by reference the 2009 10-K, the Q1 2010 10-Q, the Q2 2010 10-Q and

certain other documents. The Prospectus Supplement, which was issued pursuant to a

Registration Statement filed with the SEC on Form S-3 dated October 14, 2010 signed by

Defendants Zhu, Wu, and Zhao, among others, states, in part, the following:

Our operations are conducted exclusively in China through our 90% ownedsubsidiary, Shanxi Puda Coal Group Co., Ltd., or Shanxi Coal.

* * *

Capital Increase of Shanxi Coal

As part of the Shanxi provincial government's policies to consolidate andredevelop the coal mining industry, new guidelines were adopted by thegovernment in February 2010 to require the registered capital of coal mineconsolidators to be at least RMB200 million (US$29.3 million). The newrequirement was adopted to ensure that coal mine consolidators have sufficientfinancial strength to consolidate coal mines efficiently. The registered capital ofShanxi Coal at that time was RMB22.5 million (about US$2.7 million). AsShanxi Coal had been approved as an acquirer and consolidator of certain coalmine projects, Shanxi Coal increased its registered capital to RMB500 million(US$73.2 million) as required by the government's policies, 90% of which wouldbe funded by Shanxi Coal's 90% shareholder, Shanxi Putai Resources LimitedCo., or Putai, and 10% of which would be funded by Shanxi Coal's 10%shareholder, Mr. Ming Zhao.

41. On March 14, 2011, the Company issued a press release concerning its financial

results for the fourth quarter and year ended December 31, 2010. Among other things, the

Company reported net revenue of $90.5 million, gross profit of $9.2 million, operating income of

$6.7 million and a net income of $4.4 million, or $0.18 per fully diluted share for the fourth

quarter.

42. On March 16, 2011, Defendants caused the Company to file its 2010 10-K for the

year ended December 31, 2010 with the SEC. The 2010 10-K, which was signed by Defendants

17

Zhu, Wu, and Zhao, among others, included certifications pursuant to the Sarbanes-Oxley

Section 302 of Defendants Zhu and Wu substantially the same as above in If 26, and stated, in

part, the following:

We are a supplier of premium high grade cleaned coking coal used to producecoke for steel manufacturing in the People's Republic of China (the "PRC" or"China"). We have also been appointed by government as a designated acquirerand consolidator of two coal mine consolidation projects, "Pinglu Project" and"Jianhe Project". Our headquarters is located in Taiyuan, Shanxi Province, China.

Coal Washing Business:

Our processed coking coal is primarily purchased by coke and steel producers forthe purpose of making the coke required for the steel manufacturing process. Ouroperations are conducted exclusively by an entity in China, Shanxi Puda CoalGroup Co., Ltd ("Shanxi Coal"), which we control through 90% indirect equityownership.

43. The 2010 10-K also includes the following statement:

The discussion and analysis of Puda's financial condition and results ofoperations is based upon Puda's consolidated financial statements which havebeen prepared in accordance with accounting principles generally accepted in theUnited States.

44. The statements referenced in 20 - 43 were materially false and/or misleading

because Defendants failed to disclose that (1) Puda Coal's ownership interest in certain key

Company assets, most notably the Company's key operating subsidiary, Shanxi Coal, had been

wrongfully transferred to defendant Zhao, (2) as a result of the wrongful transfer of Puda Coal's

ownership interest in Shanxi Coal, its core operating subsidiary, Puda Coal's assets and

corresponding value was materially diminished, (3) Puda Coal's operating results and financial

condition were materially misstated, (4) the Company had material deficiencies in its internal

controls over its financial reporting, (5) the Company's financial statements were materially false

and misleading and not presented in accordance with GAAP, and (6) Defendants had no

reasonable basis for their positive statements about Puda Coal's business and financial results.

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VI. THE TRUTH BEGINS TO EMERGE

45. On April 8, 2011, before the opening of trading, a publicly circulated news article

entitled "Puda Coal Chairman Secretly Sold Half The Company and Pledged The Other Half To

Chinese PE Investors" reported as follows:

Shanghai, China — Chinese RIO Puda Coal, Inc (NYSE AMEX: PUDA)Chairman Ming Zhao transferred the ownership of PUDA's sole Chineseoperating entity, Shanxi Puda Coal Group Co., Ltd ("Shanxi Coal"), to himself in2009 without shareholder approval according to official government filings.

Then, in 2010 Zhao sold 49% and pledged the other 51% of Shanxi Coal to CITICTrust Co., Ltd ("CITIC"), a Chinese private equity fund, for RMB245 million($37.1 million). Zhao then recklessly leveraged Shanxi Coal by borrowingRMB3.5 billion ($530.3 million) from CITIC at an incredibly high 14.5% interestrate (including fees) to finance the development of its coal mines.

PUDA shareholders are completely unaware of these transactions that decimatethe value of its U.S. listed shares.

* * *

On 9/3/09, Yao Zhao (Ming Zhao's brother and the legal representative ofPUDA's WFOE, Shanxi Putai Resources Limited, ("Putai") illegally authorizedPutai to transfer 90% of Shanxi Coal to Ming Zhao, adding to the 8% Ming Zhaoalready held. Additionally, Yao Zhao divided his own 2% of Shanxi Coalbetween Ming Zhao and Wei Zhang. An official copy of the "Notification ofShare Registry Change" can be downloaded here, including a partial translation.The transfers resulted in Ming Zhao owning 99% of Shanxi Coal, leaving U.S.investors with nothing. Incredibly, PUDA's auditor, Moore Stephens, failed tocatch this theft of an entire company that is clearly documented ingovernment ownership filings that any lawyer can obtain direct from thesource. [Emphasis in original.]

After stealing Shanxi Coal from U.S investors, Ming Zhao began looking fordomestic investors to fund his aggressive expansion plans. At the same time,Zhao brazenly continued trying to raise money for PUDA in the U.S., despite thefact PUDA (without Shanxi Coal) was just a shell company. As U.S. capitalmarkets recovered, on 2/19/10 PUDA sold 3.284 million shares in a publicoffering underwritten by Brean Murray and Newbridge Securities raising $14.5million (8-K here), without disclosing to the investors that PUDA no longerowned Shanxi Coal, its sole operating subsidiary in China. Why did BreanMurray fail to perform any basic legal due diligence on the real ownership ofShanxi Coal.

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* * *

On 12/16/10 PUDA again tapped the U.S. capital markets, this time for $101.5million by selling 7.85 million shares at $12 per share in a public offeringunderwritten by Macquarie Capital and brean Murray (8-K here). PUDA againfailed to disclose Chairman Zhao's 9/3/09 illegal transfer of 99% of Shanxi Coalto himself, nor Zhao's illegal sale of 49% of Shanxi Coal to CITIC for $37.1million, nor the $530 million 14.5% loan from CITIC secured by the pledge of theremaining 51% of Shanxi Col shares. Why did Macquarie Capital also fail toperform basic legal due diligence on the real ownership of Shanxi Coal, half ofwhich had been already sold to CITIC? Furthermore, at $12 per share, Macquarieinvestors paid over six times the $1.91 valuation CITIC paid for 49% of ShanxiCoal in July. . . .

46. On April 8, 2011, Puda Coal did not deny the allegations, but responded to the

publicly circulated allegations in a press release that stated, in part, as follows:

TAIYUAN, China, April 8, 2011 /PRNewswire-Asia-FirstCall/ Puda Coal,Inc. (NYSE AMEX: PUDA) ("Puda Coal" or the "Company"), a supplier of highgrade metallurgical coking coal used to produce coke for steel manufacturing inChina and consolidator of nine coal mines in Pinglu County Yuncheng Cityknown as Pinglu Project and four coking coal mines in Huozhou County LinfenCity known as Jianhe Project in Shanxi Province, today announced that it iscurrently reviewing the allegations regarding improper share transactions by theCompany's Chairman, Mr. Ming Zhao, which were published on an investorwebsite on April 8, 2011. The Company intends to provide a formal response tothe allegations as soon as practical.

47. On April 8, 2011 shares of Puda Coal declined by $3.10 per share, more than

34%, to close at $6 per share on heavier than usual volume.

48. On April 11, 2011, before the market opened, Puda Coal issued a press release as

set forth in 6 above announcing the commencement of an investigation into "the allegations

raised in a recent article alleging various unauthorized transactions in the shares of a subsidiary

company, Shanxi Coal," admitting that it had already found evidence of transfers by Defendant

Zhao inconsistent with its public securities filings, and indicating that Defendant Zhao was

taking a leave of absence immediately as Chairman of the Board of the Company.

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49. As noted in the Company's April 11, 2011 press release, the Company's stock

was halted from trading prior to the time the market opened and it has continued to be halted

since April 11, 2011.

VII. ADDITIONAL SCIENTER ALLEGATIONS

50. As alleged herein, defendants acted with scienter in that defendants knew that the

public documents and statements issued or disseminated in the name of the Company were

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced

in the issuance or dissemination of such statements or documents as primary violations of the

federal securities laws. As set forth elsewhere herein in detail, defendants, by virtue of their

receipt of information reflecting the true facts regarding Puda Coal, their control over, and/or

receipt and/or modification of Puda Coal's allegedly materially misleading misstatements and/or

their associations with the Company which made them privy to confidential proprietary

information concerning Puda Coal, participated in the fraudulent scheme alleged herein.

51. Defendants knew or recklessly disregarded the falsity and misleading nature of

the information which they caused to be disseminated to the investing public. The ongoing

fraudulent scheme described in this complaint could not have been perpetrated over a substantial

period of time, as has occurred, without the knowledge and complicity of the personnel at the

highest level of the Company, including the Individual Defendants. Defendants had the motive

and opportunity to perpetrate the fraudulent scheme and course of business described herein

because the Individual Defendants were the most senior officers of Puda Coal, issued statements

and press releases on behalf of Puda Coal and had the opportunity to commit the fraud alleged

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herein. Further, Defendants were motivated to commit the fraud alleged in order to complete two

public offerings of Company shares at inflated prices during the Class Period.

VIII. LOSS CAUSATION/ECONOMIC LOSS

52. During the Class Period, as detailed herein, defendants engaged in a scheme to

deceive the market and a course of conduct that artificially inflated Puda Coal's stock price and

operated as a fraud or deceit on Class Period purchasers of Puda Coal's common stock by

misrepresenting the Company's operating condition and future business prospects. Defendants

achieved this by making positive statements about Puda Coal's business and financial results

while they knew or recklessly disregarded that the Company's Chairman, Defendant Zhao, had

wrongfully transferred the Company's key operating subsidiary to himself Later, however,

when defendants' prior misrepresentations were disclosed and became apparent to the market,

the price of Puda Coal's common stock fell precipitously as the prior artificial inflation came out

of Puda Coal's stock price. As a result of their purchases of Puda Coal common stock during the

Class Period, plaintiff and other members of the Class suffered economic loss, i.e., damages

under the federal securities laws.

IX. FRAUD-ON-THE-MARKET DOCTRINE

53. At all relevant times, the market for Puda Coal's common stock was an efficient

market for the following reasons, among others:

(a) The Company's common stock was actively traded in a highly efficient

market;

(b) As a regulated issuer, the Company filed periodic public reports with the

SEC;

(c) The Company was covered regularly by securities analysts; and

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(d) The Company regularly issued press releases which were carried by

national news wires. Each of these releases was publicly available and entered the public

marketplace.

54. As a result, the market for the Company's common stock promptly digested

current information with respect to Puda Coal from all publicly available sources and reflected

such information in the price of the Company's securities. Under these circumstances, all

purchasers of the Company's common stock during the Class Period suffered similar injury

through their purchase of the common stock of Puda Coal at artificially inflated prices and a

presumption of reliance applies.

X. NO SAFE HARBOR

55. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking

statements" when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements. Alternatively, to the

extent that the statutory safe harbor does apply to any forward-looking statements pleaded

herein, defendants are liable for those false forward-looking statements because at the time each

of those forward-looking statements was made, the particular speaker knew that the particular

forward looking statement was false, and/or the forward-looking statement was authorized and/or

approved by an executive officer of Puda Coal who knew that those statements were false when

made.

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FIRST CLAIM FOR RELIEF

For Violation of Section 10(b) of the Exchange Actand Rule 10h-5 Promulgated Thereunder Against All Defendants

56. Plaintiff incorporates !II 1 - 55 by reference.

57. During the Class Period, defendants disseminated or approved the false

statements specified above, which they knew or deliberately recklessly disregarded were

materially false and misleading in that they contained material misrepresentations and failed to

disclose material facts necessary in order to make the statements made, in light of the

circumstances under which they were made, not misleading.

58. Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 in that

they:

(a) Employed devices, schemes and artifices to defraud;

(b) Made untrue statements of material facts or omitted to state material facts

necessary in order to make statements made, in light of the circumstances under which

they were made not misleading; or

(c) Engaged in acts, practices, and a course of business that operated as a

fraud or deceit upon plaintiff and others similarly situated in connection with their

purchases of Puda Coal common stock during the Class Period.

59. Plaintiff and the Class have suffered damages in that, in reliance on the integrity

of the market, they paid artificially inflated prices for Puda Coal's common stock. Plaintiff and

the Class would not have purchased Puda Coal common stock at the prices they paid, or at all, if

they had been aware that the market prices had been artificially and falsely inflated by

defendants' misleading statements.

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60. As a direct and proximate result of these defendants' wrongful conduct, plaintiff

and the other members of the Class suffered damages in connection with their purchases of Puda

Coal common stock during the Class Period.

SECOND CLAIM FOR RELIEF

For Violation of Section 20(a) of the Exchange ActAgainst the Individual Defendants

61. Plaintiff incorporates 1 - 55 by reference.

62. The Individual Defendants acted as controlling persons of Puda Coal within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, participation in and/or awareness of the Company's operations and/or intimate

knowledge of the statements filed by the Company with the SEC and disseminated to the

investing public, the Individual Defendants had the power to influence and control and did

influence and control, directly or indirectly, the decision-making of the Company, including the

content and dissemination of the various statements which plaintiff contends are false and

misleading. The Individual Defendants were provided with or had unlimited access to copies of

the Company's reports, press releases, public filings and other statements alleged by plaintiff to

be misleading prior to and/or shortly after these statements were issued and had the ability to

prevent the issuance of the statements or cause the statements to be corrected.

63. In particular, the Individual Defendants had direct and supervisory involvement in

the day-to-day operations of the Company and, therefore, are presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same.

64. As set forth above, Puda Coal and the Individual Defendants each violated

Section 10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue

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of their positions each as a controlling person, the Individual Defendants are liable pursuant to

Section 20(a) of the Exchange Act. As a direct and proximate result of Puda Coal's and the

Individual Defendants' wrongful conduct, plaintiff and other members of the Class suffered

damages in connection with their purchases of the Company's common stock during the Class

Period.

THIRD CLAIM FOR RELIEF

Violations of Section 11 of the Securities Act Against All Defendants

65. Plaintiff repeats and realleges each and every allegation contained above,

except for any allegations sounding in fraud or intentional or reckless misconduct.

66. This Count is brought pursuant to Section 11 of the Securities Act, 15 U.S.C.

§77k, on behalf of the Class, against Puda Coal and the Individual Defendants.

67. The Prospectus Supplement dated December 8, 2010, which includes the

Registration Statement filed with the SEC on October 14, 2010 on Form S-3, was inaccurate

and misleading, contained untrue statements of material facts, omitted to state other facts

necessary to make the statements made not misleading, and omitted to state material facts

required to be stated therein.

68. Puda Coal is the issuer. As issuer of the shares, Puda Coal is strictly liable to

Plaintiff and to the members of the Class who purchased pursuant and/or traceable to the

Registration Statement and Prospectus Supplement for the materially untrue statements and

omissions alleged herein.

69. The Individual Defendants were officers and/or directors of Puda Coal and

signed the Registration Statement or authorized it to be signed on their behalf and were

responsible for the contents and dissemination of the Registration Statement.

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70. By reasons of the conduct herein alleged, each defendant violated, and/or

controlled a person who violated, Section 11 of the 1933 Act.

71. Plaintiff and the Class purchased Puda Coal shares pursuant and/or traceable

to the Registration Statement and Prospectus Supplement and sustained damages thereby.

The value of Puda Coal shares has declined substantially subsequent to and due to

defendants' violations.

72. At the time of their purchases of Puda Coal shares, Plaintiff and other

members of the Class were without knowledge of the facts concerning the wrongful conduct

alleged herein and could not have reasonably discovered each of those facts prior to April 11,

2011.

73. This claim was brought within the applicable statute of limitations.

COUNT IVViolations of Section 15 of the Securities Act

Against the Individual Defendants

74. Plaintiff repeats and realleges each and every allegation contained above

except for any allegations sounding in fraud or intentional or reckless misconduct.

75. This Count is brought pursuant to §15 of the Securities Act against Defendants

Zhu, Wu, and Zhao.

76. Defendants Zhu, Wu, and Zhao were each a control person of Puda Coal by

virtue of his position as a director and/or senior officer of Puda Coal.

77. As a control person of Puda Coal, Defendants Zhu, Wu, and Zhao are liable

jointly and severally with and to the same extent as Puda Coal for its violation of Sections 11 of

the Securities Act.

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PRAYER FOR RELIEF

WHEREFORE, plaintiff prays for judgment as follows: declaring this action to be a

proper class action; awarding rescission and/or damages, including interest; awarding

reasonable costs, including attorneys' fees; and such equitable/injunctive relief as the Court may

deem proper.

JURY DEMAND

Plaintiff demands a trial by jury.

DATED: April 19, 2011KAPLAN FOX & KILSHEI ER LLP

By:

Frederic S. FoxDonald R. HallJeffrey P. CampisiPamela A. Mayer850 Third AvenueNew York, NY 10022Telephone: 212-687-1980Facsimile: 212-687-7714Email: ffox@kaplanfox.com

dhall@kaplanfox.comjcampisi@kaplanfox.compmayergkaplanfox.com

Counsel for Plaintiff

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