Sino Agro Food deems it in the best interests of its shareholders to provide the marketplace with a discussion and clarification with regards to the company’s filings with the SAIC in the Peoples Republic of China.
Management has recently been made aware that the company may become the target of a negative campaign based on the premise that the company’s SAIC filings do not correlate with the company’s filings with the US Securities and Exchange Commission.
In accordance with company policy to protect its shareholder interests, the company feels it is necessary to preempt these sub-par analyses interwoven with charges of non-compliance made against the company.
To substantiate facts, the company is pulling its SAIC filings and will make them publicly available to shareholders, upon request.
The company’s main office in the Guangzhou Province is registered as a representative office, and is not, according to PRC law, required to submit annual financial statements to the SAIC, although the company said they are required to file financial statements related to their Guangzhou office’s Chinese related expenses with the State Administration of Taxation (SAT).
Therefore, no comprehensive organisational or consolidated financial statements are ever filed with the SAT, or with the SAIC. The SAIC reports do not contain the level of detail or updated financial statements that are contained in their audited and non-audited consolidated US SEC financial reports.
Many of the company’s subsidiaries only recently have been approved as sino joint venture companies, and subsequently no filings have been made for these subsidiaries with the SAIC or SAT. However, all revenue generating subsidiaries have completed paid in capital requirements for formation and operation. These actions have been appropriately documented in the company’s filings with the SEC.
The company acknowledges discrepancies in its SAIC filings dated January 13, 2010, regarding SanJiang A Power (SJAP) in Xining, China. For this reported period, there were sales tax exemption coupons, construction tax exemption coupons, development tax exemptions and government incentive grant coupons that had not been fully processed at the time of filing with the SAIC.
To avoid taxation complications, and because the SAIC is not a regulatory agency like the SEC, SJAP filed this financial report mainly for the purpose of establishing company operations. Another of the company’s subsidiaries has similar discrepancies due to tax exemption status as an agriculture company.
With respect to their 2011 reports to be filed with the SAIC, their subsidiaries’ tax exemptions and allowances for differences between US GAAP and China’s Accounting Standards for Business Enterprises (ASBEs) will be current and incorporated, and will more closely resemble those filed with the SEC.
The company acknowledges the concerns over these discrepancies, and will work diligently to ensure complete financial accuracy and congruity between such financial statements and the financial statements contained in their audited and non-audited SEC filings, the company said.
Solomon Lee, CEO of the company, said: “I want to personally assure our shareholders that everything is in order with our filings with SAIC and that there are reasonable explanations as to why they may not currently match our filings with the SEC. We have identified the site that intends to release this information and for now will give them a chance to get the facts correct before publishing false information.
“Neither myself, nor our investor relations team has been contacted regarding this matter by any of these outside parties who may be responsible for future false reports in this vein. We find it extremely unprofessional and reckless, that such a website that proclaims to pride itself on providing investors information, would release such false and defamatory information to the public without first contacting the company to check facts. It is a disservice to our shareholders and the general investment public, and may be part of an agenda unrelated to providing investors information.”
Source: Sino Agro Food
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