Welcome!

News Feed Item

Hanfeng Evergreen Reports on Current Situation

TORONTO, ONTARIO -- (Marketwired) -- 01/20/14 -- Hanfeng Evergreen Inc. (TSX: HF) ("Hanfeng" or the "Corporation") reported today on its current situation during its management transition.

Governance, Management and Operations

As previously disclosed, the former CEO, Xinduo Yu, was removed on January 7, 2014, by the Board of Directors of the Corporation as an officer of the Corporation, and as an officer, director or legal representative of any subsidiary of the Corporation. All other directors of the Corporation's subsidiaries were removed on January 10, 2014. Despite these board authorized changes, subsequent to his dismissal, the former CEO has made public representations that he does not intend to respect the decision of the Board of Directors, and said in part that, "he and his current management team will continue to lead the Hanfeng effort" and that it is "business as usual at Hanfeng".

The Corporation is now taking all necessary steps to notify the applicable regulatory authorities and third parties in China, and elsewhere, of these changes and to make the applicable registrations and regulatory filings in connection with these changes. The government filings that are required in China to change the legal representative and to replace directors are in process. The Corporation has retained Chinese legal counsel to assist in these steps and generally to provide legal advice concerning compliance with Chinese laws, and as previously announced, has retained FTI Consulting as interim manager in China. The Corporation has been advised that the process of fully transitioning governance and management, particularly in China, can require as long as six weeks, or possibly longer, particularly in circumstances such as these where the former CEO continues to represent to personnel and third parties, directly or indirectly, that he is still an officer of the parent Corporation or an officer, director or legal representative of the subsidiaries.

As the Corporation's news release stated on January 8, 2014, this management transition is a complex process occurring within a global enterprise operating under multiple corporate legal systems. Accordingly, such changes are not fully accomplished instantly.

Since the removal of the CEO, and the removal of all other directors of the subsidiaries, the management of the subsidiaries has been advised of these changes and, at this point in time, it is uncertain whether or not the management in China or in the other subsidiaries will accept or respect these changes on a timely basis without further action being taken. Neither the Corporation nor FTI Consulting is in a position to confirm whether the new legal representatives and directors appointed to each of the Corporation's two subsidiaries in China, or the new directors of the other subsidiaries, are able to perform their roles and responsibilities in cooperation with its staff. The Corporation's appointed legal representatives are not in possession of the official company seals, referred to as "chops" for the two subsidiaries in China.

Electronic Communications

Subsequent to the termination of the CEO, the electronic communications for the Corporation's e-mail (@hanfengevergreen.com) and web site (www.hanfengevergreen.com ) were transferred to a new service provider in China without the approval of the Board of Directors or the management team in Canada. Electronic communications for certain Chinese subsidiaries at www.hanfeng-group.com are directly or indirectly under the control of the former CEO and control has not yet been transitioned to the Corporation. Accordingly, the Corporation is in the process of attempting to regain complete control of these communication platforms and in the meantime advises all parties sending or receiving e-mails or communicating by way of any e-mail associated with the domains hanfengevergreen.com or hanfeng-group.com, or any representation concerning the Corporation or its subsidiaries on those web sites and e-mail servers, that until further notice, those communication platforms are not fully under the control or direction of the Corporation and may not be relied upon.

Financial Situation

In order to provide funding for Corporation's operations in Canada, the Board of Directors has previously authorized the direction and payment of funds from two Chinese subsidiaries to the Canadian parent corporation. As previously disclosed, the repatriation of funds from China to Canada is not without risk and uncertainty. In this regard, the Corporation's Annual Information Form dated September 30, 2013 previously filed on www.sedar.com states in part,

"Repatriation of Profit and Currency Conversion ... any foreign exchange transaction on the capital account is subject to prior approval from the State Administration of Industry and Commerce ("SAIC"), and the State Administration for Foreign Exchange ("SAFE") of the PRC. ... The Corporation's wholly-owned subsidiaries in China may pay dividends to the Corporation or pay outstanding current account obligations in foreign exchange but must present the proper documentation to a designated foreign exchange bank in order to do so. There can be no assurance that the availability of foreign currency will be sufficient for the Corporation's subsidiaries to pay dividends to the Corporation or to satisfy their other foreign currency obligations, or that the SAFE or SAIC will approve said transfer. .... Furthermore, the time it takes to repatriate funds is unpredictable, and the exact process for repatriation is unclear."

In the current circumstances, it has come to the Corporation's attention that in connection with prior directed transfers of funds on capital account from China to Canada during 2013 by one of the Corporation's Chinese subsidiaries, Hanfeng Slow-Release Fertilizer (Jiangsu) Co., Ltd ("Jiangsu Subsidiary"), one or more representatives of the Jiangsu Subsidiary is alleged to have made one or more false declarations to SAFE, which, if it occurred, would have been directly contrary to the explicit, written funding instructions that any such wire transfer was only approved subject to all relevant law and customs of the People's Republic of China. As a result, the Corporation has been informed by the management of both of its subsidiaries in China that any further fund transfer by these subsidiaries from China is held up pending the outcome of an investigation by SAFE. The Corporation, in conjunction with its legal counsel in China, is in the process of undertaking an investigation of the situation and intends to cooperate with the SAFE authorities.

These restrictions on inter-company transfers have impacted the ability of the Corporation to secure the necessary funds for the sustained operations of the Canadian public company, and have had an adverse impact on liquidity. In the absence of being able to promptly return capital from China to Canada, the Corporation is exploring various financing and related alternatives, which may include seeking to source private lending, debt and/or equity capital.

Given the overall situation with management reporting and operations, and internal controls and procedures, particularly in its Chinese operations, the Corporation believes there is significant risk that its financial reporting, in particular the financial statements for the quarter ended December 31, 2013, may be delayed.

Trading on TSX

On January 15, 2014, the Toronto Stock Exchange suspended trading in the Corporation's common shares pending clarification of the Corporation's affairs. As at the date of this release, the Corporation's common shares remain halted.

Forward-Looking Statements

This news release contains forward-looking statements based on current expectations, including but not limited to the Corporation's plans, objectives and expectations and the exploration by the Corporation of strategic alternatives. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about the Corporation's business are more fully discussed in the Corporation's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada. Additional important factors that could cause actual results to differ materially include, but are not limited to: the ability of the Corporation to preserve or monetize its working capital; the effective ability of the Corporation to appoint directors and representatives of its subsidiaries in China and elsewhere; delays in financial reporting; and the implementation of any alternative or financing transaction on acceptable terms. 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 Corporation 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 provided for the purpose of providing information about the Corporation's current expectations and plans relating to the future. 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. The Corporation 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 two of world's most significant agricultural markets: the People's Republic of China and the Republic of Indonesia. Hanfeng is headquartered in Toronto, Ontario and its shares are listed on the Toronto Stock Exchange under the symbol HF.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...