Wednesday, 21 June 2017

Naibu Global / Sorbic / China Food , are the filthy still alive ?

22nd June 2017 

Naibu Global International Company plc (or "the Company") 

Press release

Shareholder Update

The Board of Naibu Global Investment Company Plc ("Naibu" or "the Company") wishes to update shareholders as follows. 

Since its last announcement on 10 December, 2016, the Board of Naibu, which now comprises Giles Elliott, David Thomas and Stephen Cheung (the "Board" or the "NEDs"), has been pursuing a number of initiatives, which are detailed below. 

Numerous attempts have been made to contact Lin Huoyan and Lin Congdeng, who were the Chinese Executive Directors of the Company (the "Chinese Directors"), without success.  Neither individual has responded to any approach, and neither are traceable via any of the addresses which they have supplied to the Board in the past.  Lin Huoyan has, however, responded to legal notices issued through a newspaper advertisement (see below), but he is effectively hiding his residential address from the Board, making it very difficult to serve him with legal documentation.  Consequently, the Chinese Directors have now been removed from the Board of Naibu. 

In order to take control of Naibu's underlying businesses, the Board proceeded to initiate actions to take control of Naibu (H.K) International Investment Limited ("Naibu HK"), the intermediate holding company and 100% subsidiary of Naibu, registered in Hong Kong and of Naibu China Limited ("Naibu China"), the underlying Chinese subsidiary, registered in the People's Republic of China ("PRC") and 100% owned by Naibu HK.  In February 2015, the Board passed a resolution removing Lin Huoyan, Lin Congdeng and Lin Zhenzhi (Lin Huoyan's sister and Lin Congdeng's wife) from the Board of Naibu HK and appointing the NEDs to the Board of Naibu HK.

Chinese litigation

In June 2015, as required under the laws of the PRC ("PRC Law"), the NEDs, through Naibu HK, issued legal proceedings in China to remove Lin Huoyan, Lin Congdeng and Lin Zhenzhi, as directors of Naibu China.  During the course of this litigation, representations were made to the Chinese Courts, by parties associated with Lin Huoyan, that Naibu HK no longer wished to proceed with the litigation on the basis that Lin Huoyan was now in control of Naibu HK.  This assertion, however, was a result of Lin Huoyan, or parties associated with him, filing forged papers with the Hong Kong Companies Registry, purporting that the NEDs had resigned as directors from Naibu HK and Lin Huoyan had reappointed himself as a director of Naibu HK.  As a result, and to correct the forged filings, the NEDs also initiated litigation in Hong Kong, the details of which are set out below.  This litigation has in turn delayed the litigation in China.  The Chinese Court has now ruled in favour of Naibu HK, and the Board is now taking steps to take full control of the Chinese subsidiary.  Under PRC Law, the Court is required to give Lin Huoyan notice of this judgement, which they have done by newspaper advertisement, and Lin Huoyan is allowed a period in which to appeal.  This period is now over, and the Board are now requesting that the Court issue an order for new Naibu China chops (official stamps) to be issued, and to put the changes to the officers of Naibu China into effect.  Once this has been completed, the Board will approach Naibu China's bankers and other relevant authorities in China to obtain Naibu China's records and bank statements.  This will enable the Board to determine what assets, if any, remain in Naibu China, and where the Company's cash has been spent.  If the Board finds that the Chinese Directors, Lin Zhenzhi or other persons have defrauded the Company, they will pass the records to the Chinese police authorities.  Once the Board has obtained full access to the records of Naibu China, it will also review the merits of bringing any legal action against the Chinese Directors, Lin Zhenzhi or other persons.

Diplomatic initiatives

In its last update, the Board referred to various approaches which it had made to the British Embassy in Beijing, and to various officials in Fujian province.  These initiatives continue to be pursued, but unfortunately have proved ineffective to date.

 Hong Kong litigation

As noted above, the NEDS have taken legal action in Hong Kong to remedy the attempt by Lin Huoyan to reappoint himself to the board of Naibu HK.  However, the Hong Kong Court, decided to allow Lin Huoyan an opportunity to present himself to the court in Hong Kong and to explain himself, which he has to date declined to do.  The Hong Kong Court also required the NEDs to give notice to Lin Huoyan to enable him to attend the Hong Kong Court, which as explained above, has proved extremely difficult.  This process is continuing, and is likely to take several more weeks to resolve, as the Hong Kong Court has now accepted that notice can be served on Lin Huoyan by newspaper advertisement in the PRC.  The Board are confident it will be resolved in their favour, but it has taken and continues to take a very long time to put into effect because of both the notice requirements of the Hong Kong Court, and because of the deliberate evasiveness of the Chinese Directors, in particular Lin Huoyan.  

UK litigation

The NEDs have been examining the possibility of making a legal claim for professional negligence against certain of the various professional advisers who were involved at the time of the floatation.  The NEDs have appointed PGB Gitlin Baker, Solicitors, a specialist City commercial litigation firm, to investigate the merits of such an action, and we have been advised that viable legal causes of action exist.  The Board intend to pursue the matter robustly and to the fullest extent possible. The loss is substantial.  Naibu's shareholder funds amounted to approximately £150 million in September 2015, which now appear to have been dissipated. 

The Board will provide shareholders with a further update as events unfold.

Giles Elliott
David Thomas
Stephen Cheung


Naibu Global Plc 

Giles Elliott
Tel: +44 (0) 7557 099 246

Abchurch (Financial PR)

Julian Bosdet / Alejandra Campuzano
Tel: +44 (0)20 7398 7741


Whether this gives hope for the other Chinese listed companies that were so oft disappearing from trace only time will tell .
Sorbic International
.LED Internmational 
China Food Company 

To name  , But a few . But too many shareholders , disaster & despair .

Perhaps the recent developments of China A shares being cast into the MSCI net , has improved the prospect of the Chinese Authorities actually showing some control over their company directors .
This space is being watched with much Interest .Is it possible that China will one day have decent regulation ?

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