Ok...here's the updated letter, reflecting the last several days of suggested changes. Let me know if I've missed anything. And Penny, to avoid confusion, please delete my post 17121. As I was previewing this, I may have gotten carried away with the "bold" print, but it is a way to focus attention on some highlights in a rather lengthy letter.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxYour Name
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxStreet address
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxCity State Zip
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxTel #
June 12, 2012
Investors Protection Bureau
Elizabeth Black
120 Broadway
New York, New York 10271
Dear Elizabeth Black;
I am writing to you as a long-term shareholder in a publicly traded company called Cetek Technologies Inc. This company has been around in various forms for 30 years and has been domiciled in Nevada since 2006, although the business charter there was allowed to lapse a number of years ago. The company headquarters is in Poughkeepsie, NY, and it trades on the pink sheets under the symbol CTKH. It currently appears that much of the business activity in Cetek Technologies Inc. takes place in a company called Cetek Inc., which is chartered in New York state, and that is my primary basis for contacting you. After over five years of total silence about the company, there is great concern amongst shareholders about what has happened to their investment, especially since the CEO Mr Fayiz Hilal seems to be conducting business almost exclusively out of another company, Cetek Inc. Cetek Inc. is not listed as a subsidiary of Cetek Technologies Inc. in the last public filing, a 15c2-11 that was filed with NASDAQ in 2006. So this major material event has never been explained to the shareholders or the SEC in any official filing. Recently, Mr Hilal updated the company's website and changed most of the Cetek Technologies Inc. references to Cetek Inc, the New York company. He also deleted the "Investors" link which previously had the stock quote, old press releases, and a message where he talked about building shareholder value.
BACKGROUND
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When I first invested in this company in the mid-2000s, Mr Hilal was providing quarterly updates to shareholders and was extremely optimistic about the company's future. He claimed to have achieved great innovations in advanced ceramics technology and claimed to have revenue growth exceeding 100% a year. It was very easy to be excited about the company because of the glowing reports being provided, and no one would ever have dreamed that he would stop providing any information at all about the company. I certainly would never have invested in the company had I known he would stop providing any information about it. During this period, Mr Hilal heavily diluted the shares and purchased two companies outright. Shortly thereafter, he stopped providing any shareholder updates and the stock price slumped about 95% from approximately .002 to .0001, where it has stayed for the duration of this silent period.
Mr Hilal is not operating in the best interest of shareholders and at a minimum, has clearly violated his fiduciary repsonsibility to shareholders. At worst, he may have shifted assets belonging to shareholders in Cetek Technologies Inc into his New York Company Cetek Inc in a fraudulent action. He is also the CEO of a third ceramic products company in New York, called Keegy Inc, which could also be benefitting from the Cetek Technologies relationship. We, as shareholders, have no way of knowing what he is doing, and it does NOT appear he has any intention of ever updating the shareholders again. He claims that a press release would cost the company over $100,000 as a reason for not providing shareholder information. But we have been able to determine that an electronic press release through 20-30,000 outlets or even an SEC filing could be accomplished for several hundred dollars. That is why I am writing to request your assistance in determining what is happening with our company. Mr Hilal maintains a veil of secrecy that shareholders cannot penetrate except for brief glimpses on the internet.
Cetek Technologies is not a worthless company and should trade on the basis of regular financial reporting provided by the company per state statute....not at zero to .0001 on the basis of no information. From what shareholders can research on the internet, and according to several respected credit reporting services, Cetek Technologies Inc has about 35 employees and revenues in the range of 5 to 10 million dollars per year. The company has not issued any new shares in almost six years, so it appears to be generating profits from the business activity, as the payroll alone would appear to be at least a couple million dollars a year. It has two subsidiaries Hybrid-tek Inc. and Belanger, which are highly respected companies and have been around for over twenty years. Hybrid-Tek recently made a significant expansion and upgrade of their manufacturing facilities. It is clear after 30 years of operation that Cetek technologies Inc. is an on-going and viable firm and this information should be communicated on a regular basis to its shareholders who made it possible. Under the statutes of Nevada, Mr Hilal is required to have a shareholder meeting aproximately once a year, which he has not done since 2005. It is my understanding that under New York law, if that is found to apply in this case through the Cetek Inc. relationship, that he is supposed to supply financial reporting to shareholders on an annual basis.
Over the years, Mr Hilal has adopted an increasingly adversarial posture towards his shareholders. He hangs up or verbally abuses many shareholders who call requesting information. And while he has consistently promised some shareholders to provide an update "soon", he never provides anything. There has been a widespread fear that if shareholders contact the SEC or the Attorney General's office that he will take further vindictive action aginst the shareholders, such as reverse splitting the stock or drastically diluting another 3 billion shares which are authorized. The Board of Directors apparently never meets and no minutes of their activities, if any, have ever been published. In short, Mr Hilal is running a public company just like it is his own personal private company, and shareholders are being abused in a manner that I have never witnessed before. The actions of the CEO can best be described as tyrannical and a total abdication of fiduciary repsonsibility to shareholders. This type of corporate governance should have no place in corporate America.
NEED FOR GOVERNMENTAL HELP
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As a result, a number of other shareholders and I are writing to you to request your assistance in determining what has happened to our company. Has Mr Hilal fraudulently merged our company into the New York company Cetek Inc? Or, if there is no fraud, why has he not updated the shareholders and SEC of the relationship between Cetek Inc and Cetek Technologies Inc and the shareholders' ownership?
Because there has been no information provided to shareholders about the company in many years, we have no idea whether the pursuit of a private lawsuit makes any sense or not. It is unlikely in my opinion if even a well-funded full scale private lawsuit against Mr Hilal would provide shareholders a full accounting of what is happening with our investment. It's also fairly certain that the cost of such an endeavor could not be justified since we have no idea what the company is worth due to his silence. Therefore, I am requesting help from governmental law enforcement to determine whether Mr Hilal is acting within the fiduciary responsibilities he has to shareholders, and if he isn't, to enforce the disclosure laws required of a public corporation operating in New York. It is hard to believe that a CEO in America could take shareholders' money and never be accountable to anyone, but that is precisely what has happened here. And it appears that as time passes and shareholders have tried to appease Mr Hilal by not complaining, that he has just been emboldened to further ignore the shareholders. In other words, his bad behavior is being rewarded.
Total silence by the CEO of any company creates an environment which is conducive to defrauding and abusing shareholders. Mr Hilal or a proxy could be using the opportunity to buy shares on the open market from shareholders for far less than they are really worth if he were publicly disseminating information, as required by statute. He also could be channeling assets away from the stockholders' company in which we invested into his own private company Cetek Inc. If ever there were a role for a governmental agency in protecting investors, this is it. There is little room to be optimistic that a CEO who won't update his shareholders after five years has their best interests at heart. Clearly, he does not, and that is why we need your help. It is pure cruelty to investors to wait for information year after year, not knowing whether their entire investment is lost or they may have a good investment. Either extreme seems possible here, depending on the integrity of Mr Hilal. But with five years of total silence and unexplained activities in his private companies, his credibility with investors is about gone.
The shareholders in this company have suffered very significant financial losses because of Mr Hilal's refusal to provide any updates about the company. It has also created a highly illiquid stock where there is almost no opportunity to sell the stock even at .0001. I purchased xxxxxxxx shares in 200x and my losses exceed $xxxxxx and I believe it is time for an accounting of what has happened and is happening with this company. I can accept investing losses as long as the company provides information about how the company is performing and I can make an informed investment decision. I purchased shares based on strong sales performance that the CEO documented in his quarterly reports, and I expected regular reports to continue as he promised. Instead, Mr Hilal kept no part of his promises to shareholders to protect and grow their investment. You just don't expect that type of behavior from a CEO and his board who have a fiduciary responsibility to keep shareholders well-informed about the company and its prospects. And at a minimum, Mr Hilal needs to be compelled to update the shareholders on the Cetek Inc relationship and provide current revenue, income, shares outstanding, and any other material information about the company, such as major customers and future prospects.
Thanks for your consideration of this request and please feel free to contact me at the telephone number above if you have any questions or need additional information. Sincerely,
AI
