HARBIN, China, June 17, 2011 /PRNewswire-Asia-FirstCall/ -- Harbin Electric, Inc. ("Harbin Electric" or the "Company") (NASDAQ: HRBN) today responded to allegations made by Citron Research in a posting on CitronResearch.com dated June 16, 2011 as yet another attempt to drive its stock price down that is based on factually incorrect as well as out-of- context information.
Mr. Yang Tianfu's brother, Mr. Yang Tianli is not, and has never been, a member of the Board of Directors of Harbin Electric.
There has never been a Civil Settlement. The case was settled privately approximately 10 years after the alleged facts with no admission of guilt by Mr. Yang Tianfu or Mr. Yang Tianli. The sole involvement of Mr. Yang Tianfu, in the referenced settlement agreement was to provide financial assistance to his brother, Yang Tianli, to settle a dispute to which neither Mr. Yang Tianfu himself nor Harbin Electric was a party.
Mr. Yang Tianfu and the Company reserve the right to bring legal actions against Citron Research for these erroneous allegations.
As to the comparison between the Company's financial statements in the filings with the PRC State Administration for Industry and Commerce (SAIC) and the SEC filings, the Company's SAIC filings may not precisely match its SEC filings because of a number of reasons. First, there are significant differences between PRC accounting standards, which are used for the Company's financial statements in SAIC filings, and the U.S. GAAP, which are used for the Company's financial statements filed with the SEC. Second, SAIC filings are not made on the Company's consolidated basis and each subsidiary often includes inter-company transactions between the Company's different subsidiaries. Therefore, financial reports based on the SAIC filing are not an accurate reflection of the Company's consolidated financial statements, and should not be relied upon as accurate and fair presentation of the Company's financial position. The Company has recently reconciled its PRC tax filings with its financial statements reported in the SEC filings for fiscal year 2009 and has not found any inconsistency in any material respect, and stands by the accuracy of its historical filings with the SEC.
Finally, through discussions with China Development Bank Corporation Hong Kong Branch ("CDB") held on June 17, 2011 in Hong Kong, CDB confirmed that it would abide the Facility Agreement dated as of June 9, 2011 to provide a $400 million term loan to fund the proposed purchase of all of the outstanding shares of Common Stock of Harbin Electric by Mr. Yang Tianfu, Abax and their respective affiliates, subject to certain conditions.
The special committee of independent directors formed by Harbin Electric's Board of Directors (the "Special Committee") to consider and evaluate this proposal is continuing its work with the assistance of its financial and legal advisors. There can be no assurance that any definitive agreement will be executed with respect to this proposal or that this or any other transaction will be approved or consummated.
A copy of the Facility Agreement between Tech Full and CDB was filed with the SEC in an SC 13D/A Form on June 9, 2011.
About Harbin Electric, Inc.
Harbin Electric, headquartered in Harbin, China, is a leading developer and manufacturer of a wide array of electric motors with a focus on innovative, customized, and value-added products. Its major product lines include industrial rotary motors, linear motors, and specialty micro-motors. The Company's products are purchased by a broad range of domestic and international customers, including those involved in the energy industry, factory automation, food processing, packaging, transportation, automobile, medical devices, machinery and tool manufacturing, chemical, petrochemical, as well as in the metallurgical and mining industries. The Company operates four manufacturing facilities in China located in Xi'an, Weihai, Harbin, and Shanghai.
Harbin Electric has built a strong research and development capability by recruiting talent worldwide and through collaboration with top scientific institutions. The Company owns numerous patents in China and has developed award-winning products for its customers. Relying on its own proprietary technology, the Company developed an energy efficient linear motor driven oil pump, the first of its kind in the world, for the largest oil field in China. Its self-developed linear motor propulsion system is powering China's first domestically-made linear-motor-driven metro train. As China continues to grow its industrial base, Harbin Electric aspires to be a leader in the industrialization and technology transformation of the Chinese manufacturing sector. To learn more about Harbin Electric, visit www.harbinelectric.com.
SOURCE Harbin Electric, Inc.