WUHAN CITY, China, Sept. 16, 2011 /PRNewswire-Asia/ -- Kingold Jewelry, Inc. ("Kingold" or the "Company") (NASDAQ: KGJI), one of China's leading manufacturers and designers of 24-karat gold jewelry and ornaments, today released an open letter to shareholders from the Company's Chairman, Zhihong Jia, to address the recent attacks on the Company.
I am fully aware of the short seller attacks in reports by Pete Long, titled "Kingold Jewelry: Kingold or Fools Gold?" parts I and II. These reports, published by a fictitious figure, have made incorrect and libelous statements, including totally fabricated and false allegations, against Kingold.
I would like to state unequivocally that Kingold has consistently filed accurate, complete and timely information with the Securities and Exchange Commission (SEC), and that we reaffirm the accuracy of all our public filings.
I have until now been reluctant to formally respond to the absurd allegations in the above-mentioned reports as I did not feel that reports with such little substance, where the writer was not even willing to disclose his identity, and which contained such ridiculous and inaccurate accusations, merited a response. However, I have been repeatedly called upon by investors to respond and now feel the need to address the most egregious of these claims. I have ignored claims regarding matters that are not under our control.
- Pete Long report I claims that Kingold's (KGJI) financial results, which were reported in an audit by Wuhan Tianli Partners Accounts ("Tianli"), differ radically from our reported numbers. Tianli has never been Kingold's auditor in the PRC, or anywhere else, nor have they ever had access to our books or records.
- The idea that Tianli performed an audit of Kingold without the Company's knowledge and without visiting or contacting me or the Company is impossible and absurd.
- Kingold's SAIC filings are publicly available from the SAIC and copies are available for review at our offices in Wuhan or New York. They are entirely and completely consistent with the financial statement and filings made with the SEC, which Kingold prepared, and which was subject to an audit by Friedman LLP.
- Kingold's SAT tax filings are completely consistent with our SAIC record, and are reviewed quarterly by our auditor.
- Kingold's revenues can easily be validated through the amount of gold products we sell, which directly ties to our gold purchase records with the Shanghai Gold Exchange, through whom we purchase 100% of our raw materials. Copies of all such purchase records are available for review at our offices in Wuhan or New York.
It appears that "naked" short sellers have attempted to manipulate our common stock price. Pete Long and the fund he works for disclose in the disclaimer that they are short Kingold's stock. They seek to profit from the stock price declining as a result of their grossly misleading statements and / or fabricated information concerning Kingold.
I would like to take this opportunity to highlight our strong financial position and to reaffirm 2011 guidance.
Specifically, as of Q2/2011, Kingold had shareholders' equity of approximately $108 million and more than $5.5 million in cash and cash equivalents, with no debt and less than $1 million in accounts receivable. I also herein reaffirm our previously announced financial guidance of $800M-$850 million in revenues and $32-34 million in net income for the calendar year 2011.
This is set to be a great year for Kingold and I am very proud of the tremendous efforts and hard work of our very talented management team and employees.
I look forward to meeting any interested parties and investors either in Wuhan or when I next visit the U.S.
About Kingold Jewelry, Inc.:
Kingold Jewelry, Inc. (NASDAQ: KGJI), centrally located in Wuhan City, one of China's largest cities, was founded in 2002 and today is one of China's leading designers and manufacturers of 24-karat gold jewelry and ornaments sold by weight. The Company sells both directly to retailers as well as through major distributors across China. Kingold has received numerous industry awards and has been a member of the Shanghai Gold Exchange since 2003. Sales have grown from $29 million in FY 2006 to $523 million in FY 2010 with net income attributable to common stockholders growing from $1.3 million to $18.2 million over the same period. For more information, please visit www.kingoldjewelry.com.
Business Risks and Forward-Looking Statements
This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. In addition, please refer to the risk factors contained in Kingold's SEC filings available at www.sec.gov, including Kingold's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Kingold undertakes no obligation to update or revise any forward-looking statements for any reason.
SOURCE Kingold Jewlery, Inc.