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| Sunday, 15 February 2015, 18:29 HKT/SGT | |
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HONG KONG, Feb 15, 2015 - (ACN Newswire) - Sound Global (Hong Kong Stock Code 967) released a clarification announcement in response to a short-selling report containing certain allegations against the company. Sound Global emphasised that the shareholders and potential investors of the company should exercise extreme caution in reading the short-selling report, which is seriously misleading, groundless and full of hyperboles and logic flaws.
Sound Global will Resume Trading on Monday 16 Feburary 2015.
Third-Party turnkey or EPC projects are main stream of the company's revenue. To improve the communication with publics, announcements will be published by the company with respect to the EPC projects awarded through public tender, according to the clarification announcement.
Beijing Epure is a key principal subsidiary of the company as it was clearly designated at the top of the group structure set out on page 42 of the company's annual report for the year ended 31 December 2013. Beijing Epure was established on 18 December 2006 with a registered and paid-up capital of US$20million. As at 31 December 2013, Net asset value attributable to the shareholders of Beijing Epure was RMB1,259.4 million. Therefore, the allegation to claim Beijing Epure was in a weak financial position and had insufficient funding is completely groundless and absurd. In fact, Beijing Epure's historical revenue was predominately "project construction revenue". In terms of financial reporting by the management of the Sound Global, both "engineering & technology services revenue" and "project construction revenue" would normally be grouped under one segment revenue named "turnkey projects and services revenue", which are all clear and traceable.
In response to the allegations against certain BOT projects of the company, the company has detailed in its clarification announcement background, contractual terms, timeline and expansion plan of each of these projects.
As described in the clarification announcement, the allegation against the interest income is malicious, misguided and naive. The company must ensure its liquidity to finance the bidding and operations of over 100 projects each year. Placement of term deposits or locking cash into financial products will significantly restrict the company's liquidity and hence, it may lose project opportunities, especially when projects require significant amount of cash commitment and prompt funding. Apart from the above BOT and TOT projects, when bidding for EPC projects, Sound Global also has to demonstrate its strong funding capabilities to win the trust of the project owners.
Topic: Press release summary
Sectors: Daily Finance, Daily News
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