GC China Turbine Announces Non-Reliance on Previously Issued Audit Reports; Internal Investigation
17 April 2012 - 12:34AM
Marketwired
GC China Turbine Corp. ("GC China" or the "Company") (OTCBB: GCHT)
today announced that it received a letter from Deloitte Touche
Tohmatsu CPA Ltd. ("Deloitte"), the Company's former independent
accounting firm, noting that Deloitte's previously issued audit
report dated April 15, 2010 in respect of the Company's financial
statements for the years ended December 31, 2008 and 2009, audit
report dated March 31, 2011 in respect of the Company's financial
statements for the years ended December 31, 2009 and 2010, and
Deloitte's completed reviews in respect of the interim financial
information for the three months ended September 30, 2009, March
31, 2010, June 30, 2010, September 30, 2010, March 31, 2011 and
June 30, 2011, should no longer be relied upon.
In correspondence with the Company, Deloitte informed the
Company on October 10, 2011 that it received an anonymous letter
alleging certain activities concerning the validity of previous
transactions, account balances and audit evidence provided to
Deloitte. Specifically, the anonymous allegation concerns
Deloitte's receipt of alleged fictitious confirmations of accounts
receivable from a Company customer, Wuhan Kaidi Electric
Engineering Co., Ltd ("Wuhan Kaidi") (an amount totaling $4.3
million as of December 31, 2010), in respect of the audit for the
year ended December 31, 2010. It is alleged that the Wuhan Kaidi
chop imprint applied to its confirmation of accounts receivable was
counterfeit. Deloitte in a letter dated to the Company dated
February 2, 2012 informed the Company that the chop imprint on the
confirmation of accounts receivable from Wuhan Kaidi was not
consistent with chop imprints of Wuhan Kaidi on filings made by
Wuhan Kaidi to local administrative authorities. Deloitte requested
that the Company undertake an investigation into the matters it had
raised and that absent such an investigation it would have no
alternative other than to formally notify the Company that their
previously issued audit reports and their completed reviews of
interim financial information should no longer be relied upon.
The Company disagrees with the haste and conclusory manner in
which Deloitte has conducted itself and the aggressive approach
that Deloitte has undertaken. Even though the Company had invited
Deloitte to accompany it to Wuhan City, China to review the
authenticity of Wuhan Kaidi's chop and receive confirmation of the
accounts receivable balance from Wuhan Kaidi directly, Deloitte had
declined to do so and instead requested that the Company hire a Big
Four independent accounting firm to conduct a full independent
forensic investigation into the allegations. Because of the
Company's current financial condition and under the circumstances,
the Company feels that such a request is both unreasonable and
unfeasible. While the Company believes that Deloitte's aggressive
position is unfortunate, the Company has directed its independent
director, Mr. Cary Zhou, full authority to investigate the
foregoing matters identified by Deloitte. To assist Mr. Zhou, the
Company has engaged Greenberg Traurig, LLP, its current outside
legal counsel, to conduct an internal investigation and report
directly to Mr. Zhou.
About GC China Turbine Corp.
GC China is a manufacturer of state-of-the-art 2-blade and
3-blade wind turbines based in Wuhan City of Hubei Province, China.
The Company holds a license to manufacture what it believes is a
groundbreaking technology which meets rigorous requirements for
low-cost and high reliability. For more information visit:
www.gcchinaturbine.com
Notice Regarding Forward-Looking
Statements
This news release contains "forward-looking statements" as that
term is defined in Section 27A of the United States Securities Act
of 1933, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended. Statements in this press release which are not
purely historical are forward-looking statements and include any
statements regarding beliefs, plans, expectations or intentions
regarding the future. Actual results could differ from those
projected in any forward-looking statements due to numerous
factors. These forward-looking statements are made as of the date
of this news release, and we assume no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those projected in the forward-looking
statements. Although we believe that any beliefs, plans,
expectations and intentions contained in this press release are
reasonable, there can be no assurance that any such beliefs, plans,
expectations or intentions will prove to be accurate. Investors
should consult all of the information set forth herein and should
also refer to the risk factors disclosure outlined in our annual
report on Form 10-K for the most recent fiscal year, our quarterly
reports on Form 10-Q and other periodic reports filed from
time-to-time with the Securities and Exchange Commission.
Contact: Todd M. Pitcher Aspire Clean Tech Communications
Phone: 760-798-4938 Email Contact
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