China sees media share price hit Waterloo

Absrtact: US time June 18, the Chinese media (NASDAQ:VISN) share price suffered Waterloo. As of the end of the day, China saw the media decline 6.67%, closed at 0.777 U.S. dollars, a record low of 0.74 U.S. dollars. The plunge stems from a message before the opening of Oak Capital (Oak investment P

U.S. time June 18, the Chinese media (NASDAQ:VISN) shares suffered Waterloo. As of the end of the day, China saw the media decline 6.67%, closed at 0.777 U.S. dollars, a record low of 0.74 U.S. dollars.

The plunge stems from an opening news-Oak Capital (Oak Investment Partners) and the Gobi Investment (Gobi) said New York State judge approved the seizure of USD 60 million in a contract-breaking lawsuit.

"This allows the market to trade the shares of the Chinese-video media based on a false story." "On the afternoon of June 19, Chinese media director Zhou Minghua said at a press conference.

January 2010, the Chinese media from the oak and Gobi bought digital Media Group (DMG), the Chinese media refers to the latter in the course of the acquisition of financial fraud, China, according to the media refused to pay 60 million U.S. dollars balance.

Since then, the dispute between the two sides, December 29, 2010 Chinese media to the New York court lawsuit, the marathon-type lawsuit continues to this day.

According to the media, China will continue to actively appeal against the allegations and claims of the former DMG shareholder fraud and actively appeal for an asset preservation ruling against the Chinese media and its subsidiaries, Vision best 2¥q, before the court is withdrawn.

Yan, senior Finance vice president of China and the media, explained that the New York State judge's decision only continued to preserve the assets of the media in the past and dismissed the summary judgment motion of oak and Gobi.

"Prior to the next July 9, the Chinese media, after continuing to collect the evidence, appealed against the court's asset preservation order and the DMG inducement to buy two." "A senior Chinese media official close to the incident said. Oak Capital and Gobi investment did not comment.

A grudge planted two years ago.

October 16, 2009, DMG CEO Cao Jiatai as the media CEO Limin beaming, his hands clasped together, at the moment when the two sides reached a merger agreement. However, the future of such harmony will be hard to come by.

2009, the Chinese media occupy the country's 18 one or two-line city of public transport TV resources, with 130,000 terminals. Also in the past two years to sign Beijing, Guangzhou, Shenzhen and other areas of the subway advertising agency rights; in the area of Metro TV subdivision, DMG is the market leader, and in nine major cities in the country, DMG obtained 30 subway line electronic media operation right.

"We thought the merger with DMG was business cooperation and integration. Yan, senior Finance vice president of China Media, said that when the merger and acquisition negotiations, the former DMG shareholders only issued management's own financial management report, and said that the third party audit can not be completed as scheduled. The two sides signed the contract quickly for the trust of the other party as a citizen of the United States and U.S. law to make a felony decision to defraud VC investors.

After signing the contract, the Chinese media found that the management of the financial management report issued by the Ernst and the firm's audit is completely different. According to this, the former DMG shareholders suspected of false packaging financial statements, making China's high prices to buy.

This difference is mainly reflected in the 2009 years ago, 8 months DMG net income and profit, DMG reported that the two figures for 104 million yuan and-50.1 million yuan, and the Ernst and the report is 66.8 million yuan and-180 million yuan, the difference is great.

China sees a lawsuit in the New York court December 29, 2010, when the merger agreement is about to expire for a year. The former DMG shareholders were not to be outdone, filed a lawsuit in the New York court that the media did not meet the contract due on time to pay the maturity of the 30 million dollar acquisition. As a result, the New York courts merged two lawsuits.

Yan admits that the commercial contract dispute, originally hoped through the legal process normal solution, but the Gobi capital, the oak investment often takes some outside the commercial morals the operation, lets the Chinese see the media extremely to be disappointed, two years lawsuit has already had to the customer, the partner and the investor to have the trouble, "they are also the shareholder Why can't it be solved in accordance with legal procedures?

November 15, 2011, the Oak Investment and Gobi Investment issued an open letter, asked the board to Limin chairman of the speech. Currently, the Gobi investment and oak investment accounted for 7.5% of China's shares in the media.

Zhou Minghua admits that before the issuance of the open letter, neither the Board nor the Secretary had received the relevant mail and fax, or even the proposal to dismiss the Chairman, nor had it been submitted to the Board before the meeting, "which directly resulted in a split between shareholders".

Zhou Minghua at the same time to the two major challenges after the purchase of DMG caused by the decline in performance, for example, DMG acquisition of the first 8 months of the revenue is 66.8 million, the whole year about more than 80 million, but after the 2010-year performance to achieve 250 million yuan, growth of three times times, "has explained all questions."

In 2011, China saw the total media revenue of 181 million U.S. dollars, compared with the 2010 138 million U.S. dollar growth of 31.2%, gross profit of 52.6 million U.S. dollars, and 2010 gross profit of 17.1 million U.S. dollars.

"Asset seizure" Rashomon door

Beijing time June 18 late at night, the United States and the agency "wind to seize China as the media 60 million U.S. dollar asset request" information in the global circulation.

The agency's venture capital and Gobi investment. Oak Capital is headquartered in the United States, the main investment focus is on broadband internet and wireless communications, information technology. Gobi Investment is headquartered in Shanghai, managing a total of more than 300 million U.S. dollars of four funds.

In addition, Charles Ramos quoted Judge Charles Ramos as saying, "China sees the media failed to pay the money." But Judge Ramos refused to make a summary decision.

"The company did not pay the amount of the money, but the news did not mention the key point of the court's decision to dismiss the verdict," the media said. "At the same time, the concept of the Chinese media to create 60 million U.S. dollar assets seized the illusion." ”

Yan explained that, in December 2011, the court confirmed the previously issued asset preservation order and allowed two VCs to obtain evidence on the asset preservation order, but the asset seizure requirements under these asset preservation orders were valid for only 90 days, so the seizure claim is now invalid.

Earlier November 3, 2011, U.S. courts dismissed the Chinese media's lawsuit against Oak and Gobi fraud, unjust enrichment, claims for compensation and defaults.

"Even if the seizure requirement is still valid, because the Chinese media's assets are almost at home, the U.S. court's seizure requirements do not touch the real assets of the Chinese media, so the seizure requirements have no effect on the company." The ' 60 million dollar asset seizure ' is a sporogenous concept. A person close to the Chinese media said.

Yan that "after the takeover, the Gobi Capital, the oak investment will be the company's OA, approved matters such as computer data sabotage, as well as the fact of fabricating false contracts, and these two are just the New York court to support the Chinese media content."