TIDMRCG
RNS Number : 8554T
RCG Holdings Limited
19 December 2012
19 December 2012
RCG Holdings Limited
("RCG" or the "Company" and together with its subsidiaries, the
"Group")
Resumption of share trading in Hong Kong
The board of directors of RCG Holdings Limited (AIM: RCG, HKSE:
802) announces that, following the announcement made by the Company
on 21 September 2012 regarding the visit from the Commercial Crime
Bureau of the Hong Kong Police Force and the suspension from that
date of trading in the Company's shares on the Hong Kong Stock
Exchange, application has been made for trading in the Company's
shares on the Hong Kong Stock Exchange to be resumed with effect
from 9:00am on 20 December 2012 (Hong Kong time).
Set out below is further information relating to the
circumstances surrounding the investigation by the Commercial Crime
Bureau.
CCB SEARCH / PRODUCTION ORDER
The board (the "Board") of directors ("Directors") of RCG
Holdings Limited (the "Company" and, together with its
subsidiaries, the "Group") announces that the Commercial Crime
Bureau of the Hong Kong Police Force ("CCB") visited the Company's
Hong Kong business office on Thursday 20 September 2012 and
executed a search warrant requiring amongst other things the
production of certain documents and information related to certain
former subsidiaries of the Company (the "Former Subsidiaries"), and
A-1 Development Inc. (a dormant company in which the Company holds
an indirect interest of 15% in the equity as an available-for-sale
financial asset and in which it has never had any management
influence) and also certain external parties, namely Top Digital
Holding Limited, Multi-Metro Limited and National Bonus
International Limited, in connection with an investigation of
possible fraud contrary to Section 16A of the Theft Ordinance.
In addition, on Monday 5 November 2012, by prior arrangement
with the CCB, the Company was served a production order by the CCB
requiring it to produce various documents all of which relate to
the Former Subsidiaries and A-1 Development Inc. and not to the
Group itself. The Company has searched its records and established
that it has no such documents and believes all documents subject to
that order are in the possession of the Former Subsidiaries and A-1
Development Inc. The Company is actively cooperating with the CCB
in its investigation and provided information to the CCB to enable
it to contact the buyers of the Former Subsidiaries and to contact
the major shareholder of A-1 Development Inc.
FORMER SUBSIDIARIES
The Former Subsidiaries are Chance Best Technology Limited,
Strong Aim Limited and Vast Base Technology Limited.
The table below sets out the dates of the acquisitions and
disposals of the Former Subsidiaries and the date of acquisition of
the Company's interest in A-1 Development Inc.
Name of company Date of acquisition Date of disposal
(percentage acquired)
----------------------------- --------------------------- ---------------------
Chance Best Technology 30 November 2007 (75.61%) 30 November 2011
Limited
8 January 2008 (9.76%)
10 November 2008 (14.63%)
----------------------------- --------------------------- ---------------------
Strong Aim Limited 24 April 2010 (70%) 30 March 2012
----------------------------- --------------------------- ---------------------
Vast Base Technology Limited 31 December 2007 (19.9%) 30 November 2011
15 May 2008 (40.1%)
15 November 2008 (20.0%)
----------------------------- --------------------------- ---------------------
A-1 Development Inc. 7 April 2009 (15%) Still held (Dormant)
----------------------------- --------------------------- ---------------------
The decisions about the disposals of the Former Subsidiaries
were made unanimously by the Board. The Former Subsidiaries were
sold because their businesses had declined and there was no
certainty that they could be treated as going concerns.
During 2011, the businesses of the Former Subsidiaries had
suffered major degradation for reasons that included the loss of
customers as a result of the competitive and saturated markets in
which they operated and the adverse publicity concerning ownership
of a significant stake in the Company and the estate of Nina Wang
Kung Yu-sum. They did not record any sales after the late second
quarter of the year 2011, resulting in a substantial drop in
profit. In addition, the recoverability of trade debts owed by
customers was considered doubtful and had to be fully provided for.
Their businesses had in effect ceased and it was decided to dispose
of them.
The buyers of the Former Subsidiaries were introduced by the
Company's business associates. The roles in the sales of Danny
Chew, the Company's Acting Chief Executive Officer, and Kenny Sim,
its Deputy Chief Financial Officer, were solely to facilitate the
documentation for the sale of these companies.
All its former interests in the Former Subsidiaries were
disposed of before execution of the search warrant. The Company
still holds an indirect investment 15% of the equity of A-1
Development Inc. which is classified as an available-for-sale
financial asset in the financial statements of the Company. The
Company has no material liabilities to any of the Former
Subsidiaries and A-1 Development Inc. and they are not debtors of
the Company.
EFFECT ON BUSINESS
The CCB search and production order have had no impact
whatsoever on the business or assets of the Company.
The Board believes that the CCB investigation will not
materially and adversely affect its business, assets and
operations.
REASONS FOR CCB INVESTIGATION
Every Director attended a board meeting on 21 September 2012,
the day after the execution of the search warrant by the CCB and
the Directors confirmed that they had no knowledge about the matter
raised by the CCB search warrant and that to the best of their
knowledge they are not being investigated, and have not been asked
by the CCB to assist in the investigation. The Directors confirm
that they still have no knowledge about the matter raised by the
CCB search warrant and that to the best of their knowledge they are
not being investigated, and have not been asked by the CCB to
assist in the investigation.
Having made reasonable enquiries, including reviewing a letter
from the CCB in reply to questions asked of the CCB, the Company
does not know the reasons for and details of the CCB investigation.
The Company cannot say categorically that the CCB investigation to
which the warrant relates is not related to the Company and/or any
of its Directors. Based on the production order and the information
available to the Company the Board believes that the CCB
investigation is related only to the Former Subsidiaries and A-1
Development Inc. The Company understands that there have been no
related charges or arrests made by the CCB.
ROLES OF DIRECTORS
None of the Directors has or ever had any role (whether in day
to day operations or otherwise) in the Former Subsidiaries or A-1
Development Inc. because either they were non-executive Directors
or they were not at any relevant time Directors of the Company or
the Former Subsidiaries and A-1 Development Inc. were not material
to the operations of the Group.
None of the current Directors has any business or family
relationship with any former Directors or substantial shareholders
of the Company.
Mr. Li Jinglong and Mr. Zhang Ligong, current executive
Directors, were not Directors at the time of its acquisitions of
interests in the Former Subsidiaries and A-1 Development Inc. but
both were executive Directors at the time of the disposal of its
interests in the Former Subsidiaries. Neither of them participated
in the negotiations for the disposal of the Former Subsidiaries as
the amounts involved were insignificant to the Group and the Former
Subsidiaries were no longer treated as going concerns. Neither of
Mr. Li and Mr. Zhang took part in day to day operations or
decisions of any of the Former Subsidiaries and A-1 Development
Inc. The roles of Mr. Li and Mr. Zhang are in development and in
strategy rather than in day to day operations. They formulate
strategy for the Group and the management of each subsidiary is
responsible for implementation of the strategy through control of
day to day operations. Both Mr. Li and Mr. Zhang focus mainly on
developing new markets for the Company in China rather than matters
such as disposal of businesses that are no longer material to the
Group. Mr. Li is Managing Director, of the Company responsible for
overseeing and managing the Group. Mr. Zhang is its Operations
Director, responsible for overseeing the operations of the
Group.
Pieter Lambert Diaz Wattimena, independent non-executive
Director, was not employed by or Director at the time of its
acquisitions of interests in the Former Subsidiaries (except Strong
Aim Limited) and A-1 Development Inc. His only role in the
acquisition of Strong Aim Limited was to assess the proposed
transaction in his capacity as an independent non-executive
Director and to vote on the board resolution in respect of the
acquisition. He does not have and has never had any role in day to
day operations of the Company. At the time of the disposals of the
Former Subsidiaries, his role was to assess the proposed
transactions in his capacity as an independent non-executive
Director and to vote on the board resolutions in respect of the
disposals.
Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman, appointed as an
independent non-executive Director on 1 June 2010 and re-designated
as a non-executive Chairman on 4 October 2010, was not employed by
or a Director of the Company at the time of its acquisitions of
interests in the Former Subsidiaries and A-1 Development Inc. He
does not have and has never had any role in day to day operations
of the Company. At the time of the disposals of the Former
Subsidiaries, his only role was to assess the proposed transactions
in his capacity as a non-executive Director and Chairman and to
vote on the board resolutions in respect of the disposals.
Wang Zhongling, an executive Director, was not employed by or a
Director of the Company at the time of its acquisitions of
interests in the Former Subsidiaries and A-1 Development Inc. or at
the time of the disposal of the interests in the Former
Subsidiaries.He did not take part in day to day operations or
decisions of any of the Former Subsidiaries and A-1 Development
Inc.
Kwan King Wah, an independent non-executive Director, was not
employed by or a Director of the Company at the time of its
acquisitions of interests in Former Subsidiaries and A-1
Development Inc. or at the time of the disposal of the interests in
the Former Subsidiaries. He did not take part in day to day
operations or decisions of any of the Former Subsidiaries and A-1
Development Inc.
Zeng Min, an independent non-executive Director, was not
employed by or a Director of the Company at the time of its
acquisitions of interests in the Former Subsidiaries and A-1
Development Inc. or at the time of the disposal of the interests in
the Former Subsidiaries. He did not take part in day to day
operations or decisions of any of the Former Subsidiaries and A-1
Development Inc.
Chong Cha Hwa, Brandson a former executive Director (appointed
on 1 July 2012 and resigned on 13 November 2012), was not employed
by or a Director of the Company at the time of the acquisitions of
interests in the Former Subsidiaries and A-1 Development Inc. or at
the time of the disposal of the interests in the Former
Subsidiaries. He did not take part in day to day operations or
decisions of any of the Former Subsidiaries and A-1 Development
Inc.
Save as mentioned above, none of the current Directors were
employed by or Directors of the Company either at the time of its
acquisitions of interests in the Former Subsidiaries and A-1
Development Inc. or at the time of the disposal of its interests in
the Former Subsidiaries.
The table below summarises in respect of each Director named in
it his role in each of the Former Subsidiaries and A-1 Development
Inc., and in decisions by any of those companies, from the date
each was acquired to the date each was disposed of:
Chance Best Strong Aim Limited Vast Base Technology A-1 Development Inc.
Technology Limited Limited
---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Pieter Lambert Diaz No role in day to day No role in day to day No role in day to day No role in day to day
Wattimena operations or operations or operations or operations or
otherwise. No role in otherwise. No role in otherwise. No role in otherwise. No role in
Tan Sri Dato' Nik decisions. decisions. decisions. decisions.
Hashim Bin Nik Ab.
Rahman
Li Jinglong
Zhang Ligong
---------------------- ---------------------- ---------------------- ---------------------- ----------------------
ROLES OF SENIOR MANAGEMENT
Only two members of the Company's current senior management, the
Acting Chief Executive Officer and the Deputy Chief Financial
Officer, namely Danny Chew and Kenny Sim, neither of whom had been
appointed by the Company at the time of its acquisitions of
interests in the Former Subsidiaries and A-1 Development Inc., were
employed by it at the time of the disposal of the Former
Subsidiaries. Each of them had a limited role in the day to day
operations of the Former Subsidiaries, which consisted principally
of debt-collection activities for the benefit of the Former
Subsidiaries in preparation for a sale of the Former Subsidiaries.
Neither has or ever had any role in the day to day operations of
A-1 Development Inc., which is now dormant.
Mr. Sim's and Mr. Chew's roles in the sales of the Former
Subsidiaries were solely to facilitate the documentation for the
sale of these companies.
INTERNAL REVIEW
In addition, although on the evidence so far made available to
it the Company believes that the CCB investigation is not related
to the Company, it has instituted an internal review, being carried
out under the leadership of one of its independent non-executive
Directors, Mr. Kwan King Wah, Chairman of its Audit Committee. The
scope of this review is to examine the books and records of the
Company and its subsidiaries and to make enquiries of current staff
to seek to ascertain whether the CCB investigation is related to
the Company and/or any of its Directors, and whether there was
misconduct by the Company or its staff and subsidiaries which may
be related to the warrant. As part of this review enquiries have
been made of Mr. Kenny Sim and Mr. Danny Chew and other staff of
the Company and its books and records have been examined.
The enquiries of staff of the Company and examination of its
books and records have been completed. The CCB has given no
indication to the Company that the CCB investigation is related to
the Company and/or any of its Directors, or whether it relates to
possible misconduct by the Company or its staff and
subsidiaries.
Based on the evidence so far the Company's independent
non-executive Directors and audit committee have concluded that
there is nothing in that evidence to establish that the CCB's
investigation is related to the Company and/or any of its
Directors, or misconduct by the Company or its staff and
subsidiaries.
APPOINTMENT AND CHANGE OF DIRECTORS
The table below sets out the appointment dates of the Company's
current Directors.
Name of Director Date of appointment
------------------------------ ------------------------------------
Executive Directors
--------------------------------------------------------------------
Li Jinglong 27 September 2011
------------------------------ ------------------------------------
Zhang Ligong 27 September 2011
------------------------------ ------------------------------------
Wang Zhongling 13 November 2012
------------------------------ ------------------------------------
Non-executive Director
--------------------------------------------------------------------
Tan Sri Dato' Nik Hashim Bin Appointed Independent Non-executive
Nik Ab. Rahman Director :
1 June 2010
Re-designated as non-executive
chairman :
4 October 2010
------------------------------ ------------------------------------
Independent Non-executive Directors
--------------------------------------------------------------------
Pieter Lambert Diaz Wattimena 25 March 2010
------------------------------ ------------------------------------
Kwan King Wah 27 August 2012
------------------------------ ------------------------------------
Zeng Min 27 August 2012
------------------------------ ------------------------------------
Mr. Chong Cha Hwa, Brandson was appointed a Director on 1 July
2012 and resigned as an executive Director and authorised
representative of the Company under the Hong Kong Companies
Ordinance with effect from 13 November 2012 to focus on pursuing
personal and other business commitments.
On 13 November 2012, Mr. Wang Zhongling was appointed to fill
the casual vacancy that arose on the resignation of Mr. Chong.
The Company will make further announcements if and when further
material information is available.
Enquiries:
RCG Holdings Limited Tel: +852 2637 2800
Danny Chew, Acting Chief Executive
Officer
ir@rcg.tv
Smith & Williamson Corporate Finance Tel: +44 (0) 20 7131 4000
Limited
(Nominated adviser and broker)
Dr. Azhic Basirov / David Jones
This information is provided by RNS
The company news service from the London Stock Exchange
END
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