Obvious Holes Remain In Lentuo International's Explanation Of Disclosure And Filing Obligations
- We believe Lentuo International does not adequately address the full spectrum of two undisclosed loans executed in 2013 totaling RMB 250 million (RMB100M, RMB 150M).
- LAS does not even address one of the loans at all (RMB100 million).
- Assertion that Chairman’s “equity interest in the company is not pledged as collateral to secure the RMB150M loan” ignores fact that Chairman personally guarantees the loan with his assets.
- Assertion that the revenue of company is not pledged as collateral to secure the RMB 150 loan ignores fact that revenue from all LAS’s 4S stores are collateral to loan.
- In light of potential risk factors, it is evident that NYSE and LAS’s auditor need to scrutinize the loan structures and their potential impact to financial statements and disclosures made to shareholders.