Duoyuan Global Water Inc.'s Special Investigation Committee - Announces Results of its Review of Cash Positions with Banks and Status of Special Investigation

BEIJING, Aug. 8, 2011 /PRNewswire-Asia-FirstCall/ --

Cash Position with Banks

Duoyuan Global Water Inc. (NYSE: DGW) ("Duoyuan" or the "Company"), is a leading China-based domestic water treatment equipment supplier. The Company's Special Investigation Committee (the "Committee") today announced that based on the available bank account statements, the Company's bank balances were approximately:

(i) USD$24,362,243 plus RMB801,756,757 (USD$122,286,126) equal to USD$146,648,369 on March 31, 2011, and

(ii) USD$23,221,331 plus RMB683,530,316 (USD105,409,872) equal to USD$128,631,203 on May 31, 2011.

The Committee utilized the Company's existing eight (8) online internet banking facilities for the March 31 and May 31, 2011 RMB balances, and those internet bank balances were consistent with the bank statements. Internet banking facilities for the USD accounts will be established, but were not available to review in connection with this press release. The cash balance dates selected for the disclosure above are ones the Committee deemed demonstrative for the ongoing investigation.

Status of Special Investigation

The Committee has advised that the special investigation is ongoing and that: (i) the Committee has engaged Baker & McKenzie and PricewaterhouseCoopers ("Special Counsel") to provide assistance to the special investigation to address various allegations made against the Company; (ii) Special Counsel is in the process of gathering more information and documents, including but not limited to banking documents and sales records, and conducting review and verification of documents and the information received; (iii) verification and review of the financial records, including the cash balance figures stated above, will be conducted; (iv) interviews have been conducted with certain key members of the management team, (v) further interviews will be conducted with additional members of management and with other relevant third parties, and (vi) given the  ongoing investigation, it is premature to report any conclusions.  

The Special Committee with the assistance of its Special Counsel is working to conclude the investigation as soon as possible. The Committee intends to provide updated information from time to time on the status of its investigation efforts when it deems appropriate.

Currency Translation

This press release contains translations of certain Renminbi (RMB) amounts into US dollars at specified rates solely for the convenience of readers. The translations from Renminbi to US dollars were made at the following rates: March 31, 2011 RMB6.5564 to USD$1.00 and May 31, 2011 RMB6.4845 to USD$1.00. Duoyuan Global Water makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all.

About Duoyuan Global Water Inc.

Duoyuan Global Water Inc. is a leading China-based domestic water treatment equipment supplier. Duoyuan's product offerings address key steps in the water treatment process, such as filtration, water softening, water-sediment separation, aeration, disinfection and reverse osmosis. Duoyuan offers a comprehensive set of complementary products across three product categories: water conservation, including circulating water treatment; water purification; and water reuse treatment, including wastewater treatment. The Company has an extensive local distribution network, which provides proximity to end-user customers and responsiveness to local market demand. Learn more at www.duoyuan-hq.com.

Cautionary Note Regarding Forward-Looking Statements 

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. These forward-looking statements may include, but are not limited to, statements containing words such as "may," "could," "would," "plan," "anticipate," "believe," "estimate," "predict," "potential," "expects," "intends" and "future" or similar expressions. These forward-looking statements speak only as of the date of this press release and are subject to change at any time. These forward-looking statements are based upon management's current expectations and are subject to a number of risks, uncertainties and contingencies, many of which are beyond the Company's control that may cause actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including those described under the heading "Item 3. Key Information — Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2009, filed with the Securities and Exchange Commission on June 18, 2010, and in documents subsequently filed. 

SOURCE Duoyuan Global Water Inc.