BEIJING, June 7, 2014 /PRNewswire/ -- Lentuo International Inc. (NYSE: LAS) ("Lentuo" or "the Company"), a leading non-state-owned automobile retailer headquartered in Beijing, today responded to another article issued by GeoInvesting (the "Article") on June 5, 2014. The Company stated that the Article distorted the Company's previous response and repeatedly fabricated misleading allegations. The Company further stated that all of the allegations are based on incorrect information that has been issued by third-parties over which the Company has no control.
The Company and Mr. Hetong Guo ("Mr. Guo"), the Chairman of the Company who also controls Lentuo Electromechanical ("LE"), which is not part of the Company, further clarified the following:
(a) The RMB150 million trust loan was incurred by LE in January 2014. None of the revenues of the Company were ever nor are they currently pledged as collateral for the trust loan. The trust loan is primarily secured by the real estate assets of an independent third party with a value exceeding two times the amount of the loan. The loan is also personally guaranteed by the borrower's controlling shareholder, Mr. Guo, which is typically required by banks in China. Mr. Guo believes that, in light of the assets that back the loan, any risk of triggering his personal guarantee of this particular loan is remote. The Company believes that Mr. Guo's handling of his personal wealth and affairs poses no particular risk to the Company and thus does not warrant disclosure.
(b) Among all of the loans incurred by LE, there is not a trust loan in the amount of RMB100 million. Furthermore, neither the Company nor LE has any dealership in Beijing Yayuncun area or in the City of Changchun nor do they currently plan to establish dealerships in these places.
(c) The new Audi dealership in Beijing is under construction, owned by the Company and was consolidated in the Company's financial statements for the fiscal year ended December 31, 2013. Once it is completed, it will be operated by the Company and not LE. No proceeds from the RMB150 million trust loan have been used by the Company. If in the future the Company receives financing from LE, Mr. Guo or any other related party, such transaction will be disclosed in accordance with the rules and regulations under the U.S. securities law. LE is not carrying out any business that competes with the Company's business and does not operate any automobile dealerships. All of the automobile dealerships legally owned by LE are variable interest entities of the Company, controlled and operated by the Company through contractual arrangements, as clearly disclosed in the Company's annual report.
(d) None of Mr. Guo's equity interest in the Company or the revenues of the Company were ever nor are currently pledged as collateral for any other trust loan incurred by LE.
The Company's independent registered public accounting firm has issued a non-qualified audit opinion in connection with the Company's annual report on Form 20-F for the fiscal year ended December 31, 2013.The Company is fully committed to providing full and accurate disclosure to investors and is confident that Mr. Guo's ownership in the Company will remain unaffected by his other business interests.
The Company is considering the necessary and appropriate course of actions in response to the false allegations made by GeoInvesting or other parties, including but not limited to taking legal actions against any party who makes misleading and unsubstantiated statements or distributes untruthful information about the Company.
About Lentuo International Inc.
Lentuo is a leading non-state-owned automobile retailer headquartered in Beijing. Lentuo operates 12 franchise dealerships, 10 automobile showrooms, one automobile repair shop and one car leasing company.
Safe Harbor Statement
This press release contains forward-looking statements. These statements 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. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. 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.
For more information, please contact:
Ms. Jiangyu Luo
Lentuo International Inc.
Telephone +86 139 1029 1120
Mr. Christian Arnell
Telephone +86 10 5900 1548 in Beijing
Ms. Linda Bergkamp
Phone: +1-480-614-3004 (U.S.A.)