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
SYS-CON Events announced today that Streamlyzer will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Streamlyzer is a powerful analytics for video streaming service that enables video streaming providers to monitor and analyze QoE (Quality-of-Experience) from end-user devices in real time.
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor...
DevOps theory promotes a culture of continuous improvement built on collaboration, empowerment, systems thinking, and feedback loops. But how do you collaborate effectively across the traditional silos? How can you make decisions without system-wide visibility? How can you see the whole system when it is spread across teams and locations? How do you close feedback loops across teams and activities delivering complex multi-tier, cloud, container, serverless, and/or API-based services?
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
Today every business relies on software to drive the innovation necessary for a competitive edge in the Application Economy. This is why collaboration between development and operations, or DevOps, has become IT’s number one priority. Whether you are in Dev or Ops, understanding how to implement a DevOps strategy can deliver faster development cycles, improved software quality, reduced deployment times and overall better experiences for your customers.
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
Cloud based infrastructure deployment is becoming more and more appealing to customers, from Fortune 500 companies to SMEs due to its pay-as-you-go model. Enterprise storage vendors are able to reach out to these customers by integrating in cloud based deployments; this needs adaptability and interoperability of the products confirming to cloud standards such as OpenStack, CloudStack, or Azure. As compared to off the shelf commodity storage, enterprise storages by its reliability, high-availabil...
The security needs of IoT environments require a strong, proven approach to maintain security, 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, vic...
In the next forty months – just over three years – businesses will undergo extraordinary changes. The exponential growth of digitization and machine learning will see a step function change in how businesses create value, satisfy customers, and outperform their competition. In the next forty months companies will take the actions that will see them get to the next level of the game called Capitalism. Or they won’t – game over. The winners of today and tomorrow think differently, follow different...
The IoT industry is now at a crossroads, between the fast-paced innovation of technologies and the pending mass adoption by global enterprises. The complexity of combining rapidly evolving technologies and the need to establish practices for market acceleration pose a strong challenge to global enterprises as well as IoT vendors. In his session at @ThingsExpo, Clark Smith, senior product manager for Numerex, will discuss how Numerex, as an experienced, established IoT provider, has embraced a ...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 7-9, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.