China Medical Technologies Announces the Substantial Completion of an Independent Internal Investigation and Expected Timing of
31 July 2009 - 1:41AM
PR Newswire (US)
BEIJING, July 30 /PRNewswire-Asia-FirstCall/ -- China Medical
Technologies, Inc. (the "Company") (NASDAQ:CMED), a leading
China-based medical device company that develops, manufactures and
markets advanced in-vitro diagnostic products today announced the
substantial completion of an independent internal investigation and
the expected reporting in late August 2009 of unaudited financial
results for the quarter and fiscal year ended March 31, 2009 and
the quarter ended June 30, 2009. Independent Internal Investigation
An anonymous letter, in which allegations of irregularities and
improper conduct were made against the senior management of the
Company in connection with the Company's acquisitions of FISH and
SPR, the Company's disposal of its High Intensity Focused
Ultrasound Tumor Therapy System business, its revenues as well as
its relationships with stock analysts, was received by the
Company's audit committee. The audit committee, consisting of three
independent directors, decided to initiate an independent internal
investigation into the allegations contained in the anonymous
letter. In connection with this independent internal investigation,
the audit committee engaged an independent law firm, Paul, Weiss,
Rifkind, Wharton & Garrison LLP, as well as independent
forensic accountants, AlixPartners LLP, to assist the audit
committee to carry out this independent internal investigation. The
independent law firm and forensic accountants involved their
experienced personnel from their U.S. offices to conduct this
independent internal investigation and began their investigative
work in April 2009 and the investigation lasted for more than three
months. The investigation covered not only the entire senior
management team but also employees from various key departments of
all operating subsidiaries of the Company. The senior management
and other relevant employees of the Company fully cooperated with
the independent law firm and forensic accountants in the course of
the investigation. During the process of the investigation, the
independent law firm reported from time to time the scope,
procedures and progress of the investigation to the audit
committee. The independent law firm and forensic accountants have
substantially completed their investigative work and have reported
to the audit committee that the investigation has not identified
evidence to support the allegations made in the anonymous letter.
Mr. Xiaodong Wu, the Chairman and Chief Executive Officer of the
Company commented, "The entire senior management team is pleased
that the independent internal investigation is substantially
complete and that it has found no evidence supporting the anonymous
allegations. We can now focus our efforts back to the operations of
the Company. We are thankful for the employees and the customers
who were confident in the well-being of the Company during the past
few months. We are confident that we will able to address the
impact of this independent internal investigation on the timing of
our financial reporting and other aspects of our operations and
most importantly, the Company's fundamentals remain healthy."
During the course of this independent internal investigation, the
senior management team and certain management personnel devoted
significant time and efforts to assist with the investigation, and
had less time to spend on the Company's operations. The Company
believes that this has contributed to a decline in the Company's
sales in June 2009 and this decline has continued in July. The
Company's preliminary estimate of revenues for the quarter ended
June 30, 2009 is approximately Rmb210 million, subject to normal
book closing and adjustment procedures. In addition, the costs of
this independent internal investigation have increased the
Company's general and administrative expenses substantially for the
quarter ended June 30, 2009 and will also increase the general and
administrative expenses for the quarter ending September 30, 2009.
Annual Audit Work The senior management team and other selected
personnel provided full cooperation during the investigation with a
view to completing the investigation as early as possible. Due to
the Company's limited staff resources, the Company was not able to
commence its work relating to the audit of the financial statements
for the Company's fiscal year ended March 31, 2009, which was
originally scheduled to begin in May 2009. As the investigation is
substantially complete, the relevant management members will start
their work relating to the annual audit. The Company expects to
meet the deadline to file the Company's annual report on Form 20-F
by September 30, 2009. Announcement of unaudited financial results
for the quarter and fiscal year ended March 31, 2009 and the
quarter ended June 30, 2009 The Company expects to announce in late
August 2009 the unaudited financial results for the quarter and
fiscal year ended March 31, 2009, together with the unaudited
financial results for the quarter ended June 30, 2009. About China
Medical Technologies, Inc. China Medical Technologies is a leading
China-based medical device company that develops, manufactures and
markets advanced in-vitro diagnostic (IVD) products using Enhanced
Chemiluminescence (ECLIA) technology, Fluorescent in situ
Hybridization (FISH) technology and Surface Plasmon Resonance (SPR)
technology to detect and monitor various diseases and disorders.
For more information, please visit http://www.chinameditech.com/ .
Safe Harbor Statement This press release contains forward-looking
statements. These statements constitute "forward-looking"
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and 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" and similar statements. Such statements involve certain
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Further
information regarding these and other risks is included in the
Company's filings with the U.S. Securities and Exchange Commission,
including its annual report on Form 20-F. 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: Sam Tsang Tel: +852-2511-9808 Email: DATASOURCE: China
Medical Technologies, Inc. CONTACT: Sam Tsang at +852-2511-9808 or
Web site: http://www.chinameditech.com/
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