ORIENTAL CENTURY LIMITED

ANNOUNCEMENT – REQUEST FOR VOLUNTARY SUSPENSION OF TRADING IN SHARES


The Board of Directors (the "Board") of Oriental Century Limited (the "Company") wishes to provide clarification on the circumstances leading to its trading halt commencing on 10 March 2009.


On 9 March 2009, the Chief Financial Officer of the Company (“CFO”) was informed by KPMG, the Company's auditors, that they had difficulties seeking the reconfirmation of the bank balance and that there were doubts about the authenticity of a bank confirmation received earlier by KPMG. Mr. Wang Yuean ("Mr. Wang"), the Executive Chairman and Chief Executive Officer of the Company, instructed the CFO to defer the reconfirmation process until after the Board meeting that he had urgently convened for 10 March 2009 just that day.


Later on that same date, the CFO advised the Audit Committee that he had serious doubts over the existence of the actual bank balance held by the bank as at 31 December 2008. KPMG later informed the Audit Committee that their follow-up audit enquiries with the bank indicated that the bank had no knowledge of having issued the confirmation received by KPMG earlier and there was a significant difference between the book and actual cash balance as at 31 December 2008.


On 10 March 2009, the Board was informed by Mr. Wang, that the cash and cash equivalents amount of the Group of RMB 234,336,000 as reported on the Group’s balance sheet set out in the unaudited financial statement for the year ended 31 December 2008 announced by the Company on 24 February 2009 (“FY2008 financials”), was substantially inflated. Mr Wang had over the years inflated sales and cash balances and had diverted unspecified sums to an interested party. He alleged that he had made up fictitious accounting and related records to lead the directors, the CFO and the auditors to believe that the cash were in existence.


Accordingly, based on Mr. Wang’s statements, the Board has concerns that the FY2008 financials and the Company’s previous audited and unaudited financial statements may be inaccurate and unreliable. The full extent of the impact on the Group’s financial position is at present unclear. Mr. Wang did not provide full details of or quantify the overstatements.
At the Board meeting on 10 March 2009, Mr. Wang tendered his resignation as Executive Chairman, Director and Chief Executive Officer of the Company, and the Board accepted his resignation on 11 March 2009 and also appointed Mr. Lei Hua ("Mr. Lei"), the Chief Investment Officer of the Company, as Acting Chief Executive Officer with effect from 10 March 2009. Separate announcements as required pursuant to Rule 704(7) of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on the cessation of service of Mr. Wang and the appointment of the Acting Chief Executive Officer, will be released by the Company shortly.


As the Company is unable to reasonably assess its financial position at the present time and given the uncertainty surrounding the Group in the meantime, the Company has requested for the voluntary suspension of the trading of the Company's shares on the SGX-ST. The Board has tasked the CFO and Mr. Lei to travel as soon as possible to the People’s Republic of
China ("PRC") where the Company’s principal operations are located, to investigate the matter further, to establish control over the Company’s PRC subsidiaries, and to report back to the Board on a timely basis as soon as material facts surface.

The Company will issue further announcements as soon as more information becomes available on the matter and the situation of the Group becomes clearer.


The Board is concerned that the Group's ability to operate as a going concern may be in doubt, pending clarity on the financials of the Group. The Board wishes to advise shareholders that the Company, being an investment holding company with its main assets being interests in its subsidiaries in the PRC, has limited funds at its disposal in Singapore.


In addition, as stated in the Company’s prospectus in its initial public offering dated 22 May 2006, the departure of Mr Wang with his experience in and knowledge of the education industry in the PRC could have a material adverse impact on the Group’s operations unless a suitable replacement is found.


BY ORDER OF THE BOARD
Lotus Isabella Lim Mei Hua
Company Secretary

 

I had hopes for this stupid stock...
But I saved a bundle by dumping it very early on months ago...
I bought then dumped at a tiny loss... a disappointment for me...