NINGBO, China, July 11, 2011 /PRNewswire-Asia-FirstCall/ --
Keyuan Petrochemicals, Inc. (Nasdaq: KEYP) ("Keyuan or the
"Company"), a leading merchant manufacturer of various
petrochemical products in China,
announced today that the audit committee has received initial
findings of its independent investigation of the Company's 2010
sales and revenue. Deloitte Financial Advisory Services
("Deloitte"), King & Wood, Pillsbury Winthrop Shaw Pittman LLP
("Pillsbury") and a petrochemicals industry expert, separately
verified the accuracy of information related to the Company's 2010
sales.
On March 31, 2011, the Company's
audit committee hired Pillsbury, Deloitte, and King and Wood to
conduct an independent investigation of issues identified by the
Company's former independent public accountant, KPMG. A team of
lawyers and forensic accountants reviewed scores of documents at
Keyuan's offices, visited select customer locations throughout
China, and interviewed
representatives of the customers, and senior officers and personnel
of the Company. The independent investigators also consulted an
industry expert, who has years of experience in the petrochemicals
industry, to analyze Keyuan's production plants and operations.
Based on results from the independent investigation, the
independent investigators made the following conclusions:
- "…nothing has come to our attention to indicate that the
Company has inappropriately accounted for the specific customer
transactions we were able to test, other than the documentation
issues notes above";(1)
- "the Company-arranged interviews with selected customers
supported that the customers transacted business with the Company
in 2010";
- "in the documents that we have reviewed, we have found no
documents reflecting any intent by the Company to misstate
revenues;"
- "plant visit and document review by an expert in the
petrochemical industry supports the finding that the plant is
operating and producing petrochemicals at a quantity consistent
with the revenues stated by the Company"; and
- "interviews with management and selected Company personnel were
consistent with the above findings."
"We are pleased with the results of the independent
investigation," stated Mr. Chungfeng Tao, Chairman and Chief
Executive Officer of Keyuan Petrochemicals. "The findings support
our assertion throughout this process that we are an excellent
company on solid financial footing with a clear and focused growth
strategy. Having cooperated fully with examiners and regulators
during this extensive review process, we will continue to focus on
completing our 2010 and 1H 2011 audits."
(1) Please refer to Form 8-K we filed on July 11, 2011 for further information
About Keyuan Petrochemicals, Inc.
Keyuan Petrochemicals, Inc., established in 2007 and operating
through its wholly-owned subsidiary, Keyuan Plastics Co., Ltd., is
located in Ningbo, China and is a
leading independent manufacturer and supplier of various
petrochemical products. Having commenced production in October 2009, Keyuan's operations include an
annual petrochemical manufacturing design capacity of 720,000 MT
for a variety of petrochemical products, with facilities for the
storage and loading of raw materials and finished goods, and a
technology that supports the manufacturing process with low raw
material costs and high utilization and yields. In order to meet
increasing market demand, Keyuan plans to expand its manufacturing
capacity to include a SBS production facility, additional storage
capacity, a raw material pre-treatment facility, and an asphalt
production facility.
Safe Harbor Statement
This press release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor
provision of the 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. For
example, statements about the future use of the proceeds are
forward looking and subject to risks. Keyuan Petrochemicals, Inc.
may also make written or oral forward-looking statements in its
periodic reports to the U.S. Securities and Exchange Commission on
forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in
press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements
about the Company's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. A number of important factors
could cause actual results to differ materially from those
contained in any forward-looking statement. Potential risks and
uncertainties include, but are not limited to, risks outlined in
the Company's filings with the U.S. Securities and Exchange
Commission, including its registration statement on Form S-1, as
amended. The Company does not undertake any obligation to update
any forward-looking statement, except as required under applicable
law.
For more information, please contact:
Investor Relations:
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HC International,
Inc.
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Ted Haberfield
Executive VP
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Tel: +1-760-755-2716
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Email:
thaberfield@hcinternational.net
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Website: http://www.hcinternational.net
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Mr. Andrew Haag
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Managing Partner, USA
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Hampton Growth,
LLC
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Tel: +1-877-368-3566
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E-mail:
andrew@hamptongrowth.com
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Website: www.hamptongrowth.com
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SOURCE Keyuan Petrochemicals, Inc.