China 3C Group Clarifies That Its Foreign-Owned Subsidiaries Are Controlled Through Direct Ownership, Not Via Contractual Agreements
HANGZHOU, China, July 25, 2012 /PRNewswire-Asia/ — In response to questions from investors, China 3C Group (stock symbol: CHCG) (“China 3C”, or “the Company”, or “we”) provides clarification regarding the ownership structure of the Company’s foreign-owned entity. The Company’s Wholly Foreign Owned Entity (WFOE) Zhejiang YongXin Digital Technology Company Limited (“Zhejiang”) was incorporated under the laws of the People’s Republic of China (“PRC” or “China”) on July 11, 2005. Zhejiang became 100% controlled by Capital Future Developments Limited (“Capital”), a BVI company, through share-holding entrustment agreements on November 21, 2005. Capital became a wholly owned subsidiary of China 3C through merger agreements on December 21, 2005. As such, Zhejiang became a 100% controlled subsidiary of China 3C. Since then, the direct ownership structure has not been altered.
On August 15, 2007, we executed a series of contractual agreements between Capital and Zhejiang. However, we did not dispose of Capital’s equity ownership of Zhejiang when we executed the contractual agreements. As a result, these contractual agreements did not affect the equity ownership of Zhejiang. The agreements only provided additional support that Capital and its equity owners have the obligation and the ability to absorb any losses, and the rights to receive distribution of returns from Zhejiang. Capital remains as the owner of 100% of Zhejiang’s equity. Capital enjoys the actual shareholder’s rights to obtain any benefits that any nominal shareholders would receive from Zhejiang.
About China 3C Group
China 3C Group (“China 3C”, or “the Company”) (CHCG) is a leading wholesale distributor and retailer of 3C merchandise: computers, communication products and consumer electronics. The company specializes in wholesale distribution and retail sales of 3C products in Eastern China, focusing on products that make life more comfortable, convenient and connected. The company operates under the Yosen and Wang Da brand names. For more information, visit http://www.china3cgroup.com/.
Safe Harbor Statement
Certain statements in this press release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding the Company’s future performance. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the periodic reports that are filed with the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. The Company undertakes no duty to update these forward-looking statements except as required by law.
SOURCE China 3C Group