15 April 2003
MEDIA STATEMENT
Richina Pacific Advised Of Virgin Island Legal Action And
Revisits Profit Forecast
Statement made by Alastair MacCormick, Chairman, Richina Pacific Limited
Richina Pacific has been advised that papers have been filed in the High Court of Justice, Virgin Island, on April 11,
2003 by Richard Rainwater, a 5.12% shareholder in Richina Pacific, and J P Morgan Partners, a 9.61% shareholder, both of
whom also hold an interest in Richina Enterprise Holdings Limited (REHL). The statement of claim states that Trident
Trust Company (BVI) Limited is the trustee of Richina Equity Trust 1 and that Rainwater and J P Morgan Partners are the
lead investors in the Trust. The Trust is managed by Richina Capital Partners Limited, a company controlled by Mr
Richard Yan.
In the proceedings, Rainwater and J P Morgan Partners have sought, amongst other things, an injunction to compel the
trust company, as trustee of the Trust, to take under its control all of the Richina Pacific Limited shares currently
held by REHL (being 25.5% of the shares in Richina Pacific Limited).
If the claim is successful, there could be a change in the effective control of REHL. If this occurs prior to the date
of the allotment of shares under the proposed rights issue, REHL would be prevented from performing its obligations as
underwriter of the offer. In that event, Richina Pacific would not be able to allot those shares and subscription moneys
paid would have to be repaid to subscribers. Investors holding rights at that time would not be able to exercise those
rights.
Richina Pacific also advises that a statement as to its trading position after the first quarter ending 31 March, 2003,
needs to be updated.
Since making its statement to shareholders at the 2 April 2003 special meeting, directors have received further
information on events which have affected current trading.
- The SARs virus has severely curbed tourist numbers visiting China and curtailed local leisure activities. This has had
an immediate impact on the number of tour group visitors to the Blue Zoo Beijing aquarium attraction.
- In moving from toll manufacturing to manufacturing upholstery leather for sale under its own brand, Shanghai Richina
Leather has encountered delays in re-establishing the business with new customers, and there have also been some quality
issues. This resulted in some credits being issued to customers and a slow down in activities while remedial action was
initiated.
- The ovine garment leather sector is not currently strong, and key customers are delaying confirmation and delivery of
orders.
While these events are not major in terms of annual expectations they will impact on the first quarter’s performance.
March result’s, which will assist the company to regain from a somewhat slow start to the year, will not be sufficient
to put the company above last year to date as was stated at the 2 April meeting.
Expectations are however little changed for the half and full year and the company is anticipating a solid half and
full-year result ahead of last year’s profits of $4.2 million and $8.2 million respectively.
ENDS