|By Marketwired .||
|March 24, 2014 04:44 PM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 03/24/14 -- Hanfeng Evergreen Inc. (TSX:HF) ("Hanfeng" or the "Company") today provided an update on its previously announced efforts to normalize the business, operations and reporting obligations of the Company in Canada and China.
Management and Governance
As previously announced on February 24, 2014, Mr. Xinduo Yu has been reinstated in the positions of President and Chief Executive Officer of the Company, as well as the legal representative of all of the Company's wholly-owned subsidiaries. Mr. Yu has also been appointed the Chairman of the board of directors of the Company (the "Board of Directors"). Since his reinstatement, Mr. Yu has spent significant time in China dealing with actions taken by the former directors and officers of the Company, as well as engaging with Hanfeng's employees, key customers and suppliers, and refuting any prior allegations of wrongdoing by the Company. The Board of Directors is not aware of any police investigations being conducted against Mr. Yu and would like to confirm that Mr. Yu has all the corporate authority necessary to represent its businesses and interests in Canada and in China.
As part of this process, the Board of Directors has engaged a recognized law firm in China to assist the Company in reviewing the previous allegations of wrongdoing by the Company, investigating the status of the Company's operations in China and taking any remedial action, if necessary, to ensure that the Company can continue to carry on its business.
Sale of Indonesian Joint Venture
In light of the significant deterioration of its business in Indonesia since December 2012, the Company has approved the sale of its ownership interest in Hanfeng Slow-Release Fertilizer Pte., Ltd. (Singapore), the company holding its Indonesian joint venture interest. The Company remains focussed on rebuilding its business in China and restoring its prior relationships with its employees and key customers and suppliers.
The Company reminds investors that the process of regularization and normalization will be a long term endeavour and it may take several months before benefits, if any, are realized. The Company is pleased to report, however, that it has made significant progress with its former principal customer, Beidahuang Agricultural Company Limited, who have indicated that they are receptive to restoring their past commercial relationship with the Company.
Continuous disclosure and securities filings
The Company has initiated a process for the appointment of a successor auditor and has interviewed several prospective auditing firms to replace KPMG LLP who resigned as auditors of the Company on February 26, 2014. The process of auditor replacement has been made challenging by the current circumstances of the Company, however, the Board of Directors remains committed to finding a replacement auditor. The Company has filed a change of auditor notice in accordance with the requirements and timing of National Instrument 51-102 ("NI 51-102"). The notice is available under the Company's profile on SEDAR at www.sedar.com in the form of the reporting package required to be filed by the Company pursuant to NI 51-102.
The common shares of the Company remain subject to cease trade orders issued by Canadian securities regulatory authorities and to suspension by the Toronto Stock Exchange due to the failure to file interim financial statements for the six-month period ended December 31, 2013 and the related management's discussion and analysis and required certification. A detailed review process is being undertaken by the current Board of Directors and management on the financial and operating condition of the Company. The Company is working diligently to bring all of its filings up-to-date. Once its filings have been made current, the Company will apply to have the cease trade orders lifted.
Annual general meeting of shareholders
In light of the numerous issues facing the Company and its businesses in Canada and China, at this time, the Company is focussing its efforts on the process of normalization and the completion of its required filings. The Company hopes to schedule an annual general meeting of shareholders prior to June 30, 2014, the end of its fiscal year.
This news release contains forward-looking statements. These forward-looking statements relate to future events, performance and results, and reflect management's expectations or beliefs regarding future events, including business and economic conditions and the Company's growth, results of operations, performance and business prospects and opportunities. Forward-looking information is typically identified by words such as "anticipate", "believe", "foresee", "expect", "estimate", "forecast", "goal", "intend", "plan", "seek", "strive", "will", "may", "should", "could" and similar expressions. Specific forward-looking information in this news release includes, but is not limited to, statements with respect to the Company's search for a replacement auditor, its efforts to bring all of its filings up-to-date, its application to have the cease trade orders lifted and the scheduling of its annual general meeting of shareholders.
The forward-looking statements contained herein entail various risks and uncertainties. A number of factors could cause actual events, performance or results to vary from those reflected in these forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada and available under the Company's profile on www.sedar.com. Additional important factors that could cause actual results to differ materially include, but are not limited to, the ability of the Company to preserve or monetize its working capital, the ability of the Company to attract and retain customers, the ability of the Company to appoint directors and representatives of its subsidiaries in China and elsewhere, delays in financial reporting, the ability of the Company to raise capital if and when required, foreign exchange fluctuations and controls, general economic conditions, market and business conditions, regulatory developments, changes in government policy, employee actions (including strikes or work stoppages), environmental factors including weather conditions and the impacts from regional flooding and/or drought conditions, and litigation. In evaluating forward-looking information, readers should specifically consider the factors that may cause actual results to vary. Forward-looking statements are not guarantees of future performance.
In light of the significant uncertainties inherent in the forward-looking statements included herein, any such forward-looking statements should not be regarded as representations by the Company that its respective objectives or plans will be achieved. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein. Forward-looking statements are based on, and included for the purpose of providing information about, the Company's current expectations, beliefs and plans relating to the future which are based on the Company's perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances including, but not limited to, assumptions that are stated or inherent in such forward-looking statements, the assumptions referred to above, and assumptions regarding the ability of the Company to restore relations with its former principal customer and appoint a successor auditor and address regulatory concerns, revenue growth and operating efficiencies. Readers are cautioned that such information may not be appropriate for other purposes. In addition, these forward-looking statements relate to the date on which they are made. While the Company anticipates that subsequent events and developments may cause the Company's views to change, the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements or the foregoing list of factors, whether as a result of new information, future events or otherwise, except to the extent required by law.
About Hanfeng Evergreen Inc.
Hanfeng is a leading producer and supplier of value-added fertilizer solutions in emerging markets. It is the largest producer of slow and controlled release fertilizer in one of the world's most significant agricultural markets, the People's Republic of China. Hanfeng is headquartered in Toronto, Ontario and its shares are listed on the Toronto Stock Exchange under the symbol "HF".