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China 3C Group Clarifies That Its Foreign-Owned Subsidiaries Are Controlled Through Direct Ownership, Not Via Contractual Agr... PrintAlert
China 3c Group (QB) (USOTC:CHCG)
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Today : Wednesday 25 July 2012
China 3C Group Clarifies That Its Foreign-Owned Subsidiaries Are Controlled Through Direct Ownership, Not Via Contractual Agreements
PR Newswire
HANGZHOU, China, July 25, 2012
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.
