China Finance Online Issues Rebuttal to Short Seller Article
BEIJING, June 4, 2015 /PRNewswire/ -- China Finance Online Co. Limited ("China Finance Online", or the "Company", "we", "us" or "our") (NASDAQ GS: JRJC), a leading web-based financial services company that provides Chinese retail investors with online access to securities and commodities trading, wealth management products, investment advisory services, as well as financial database and analytics services to institutional customers, responded to the allegations raised in a report dated June 3, 2015 issued by a short seller. The Company believes that the short seller's report contains numerous errors of facts, misleading speculations and malicious interpretations of events. The Company's board of directors has been informed of the allegations made by the short seller and will consider and decide on the necessary and appropriate course of action in response to the allegations. The Company may release additional information concerning the allegations in due course and is committed to providing full and accurate disclosure to investors and to rebutting any false claims that attempt to undermine confidence in the Company's business, management, operations and corporate structure.
- Mr. Ling Wang resigned from the board of directors of the Company in May 2012 and the Company made due announcement in respect thereof. The Company should not be responsible for Mr. Wang's personal matters, especially those occurred after his departure.
- On the next day after Tencent Prism's report was released, Mr. Zhiwei Zhao had an interview with a Chinese reporter and rebutted the speculations which were groundless. Stock price of the Company recovered substantially thereafter.
- Mr. Zhiwei Zhao did not attend the earnings conference call of the Company in July 2013 due to health reasons. He was absent from the call in March 2015 for the same reason. Accusations from the short seller based on such circumstantial evidence are simply innuendo and groundless.
- Mr. Rongquan Leng's resignation was unexpected and the Company made immediate announcement upon his resignation. The Company should not be responsible for Mr. Leng's business affairs unrelated to the Company. Prior to his resignation, Mr. Leng's role in the Company had always been kept independent and the Company has never been associated with Mr. Leng's other business connections. Other than standard compensation including stock options as a board member, Mr. Leng has not acquired shares in the Company from open market or private transactions. The short seller purposefully used Mr. Leng's personal crisis to taint the Company's reputation.
- Mr. Zhiwei Zhao has never been subject to restrictions on travels. Mr. Zhiwei Zhao remains the CEO and Chairman of the Company. The changes of legal representatives and management positions in affiliate companies are a normal course of action. This happens in many companies. The short seller's reading and analysis aimed to feed into their speculation that Mr. Zhao is in legal trouble.
- The investment in real estate project was fully disclosed. Langfang project was owned by 4 individuals when China Finance Online invested. Later, by the time that Qingshi started investing in Langfang project, Mr. Zhiwei Zhao was already no longer the shareholder of Qingshi. There was no related party transaction. There had been two partial repayments. The Company will pursue legal action if the full repayment is not completed.
- Mr. Zhao personally bought the stock for $7 per share when the stock price was below $3. Regarding the sell-off triggered by the short seller's misleading allegation, the Company is now contemplating a share buyback program.
Given the Company's current status in US market and its competitors' performance in Shenzhen Stock Exchange, China Finance Online is reviewing options to enhance shareholder value. China Finance Online's competitors in China include East Money, Great Wisdom and Hithink Flush.
About China Finance Online
China Finance Online Co. Limited is a leading web-based financial services company that provides Chinese retail investors with online access to securities and commodities trading services, wealth management products, securities investment advisory services. The Company's two prominent flagship portal sites, www.jrj.com and www.stockstar.com, are ranked among the top financial websites in China. In addition to the web-based securities trading platform, the Company offers basic financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co. Ltd., the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. China Finance Online also provides brokerage services in Hong Kong.
Safe Harbor Statement
This press release contains forward-looking statements which constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. The statements contained herein reflect management's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of the Company. These risk factors and uncertainties include, amongst others, the changing customer needs, regulatory environment and market condition that we are subject to; the uneven condition of the world and Chinese economy that could lead to volatility in the equity markets and affect our operating results in the coming quarters; the impact of the changing conditions of the mainland Chinese stock market, Hong Kong stock market and global financial market on our future performance; the unpredictability of our strategic transformation and growth of new businesses, including our precious metal trading service; the prospect of our margin-related business and the degree to which our implementation of margin account screening and ongoing monitoring will yield successful outcome; the degree to which our strategic collaborations with partners will yield successful outcome; the prospect for China's high-net-worth and middle-class households; the prospect of equipping our customer specialists with new technology, tools and financial knowledge; wavering investor confidence that could impact our business; and possible non-cash goodwill, intangible assets and investment impairment may adversely affect our net income. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F under "Forward-Looking Information" and "Risk Factors". The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
SOURCE China Finance Online Co., Ltd.
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