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May 29, 2014 /PRNewswire/ -- Lentuo International Inc. (NYSE: LAS) ("Lentuo" or "the Company"), a leading non-state-owned automobile retailer headquartered in
Beijing, today responded to the allegations raised in a report issued by GeoInvesting (the "Report") on
May 28, 2014. The Company firmly believes that the Report contains numerous misstatements and misleading speculations.
The Report falsely stated that: (i) Lentuo Electromechanical ("LE"), a PRC entity controlled by the Company's chairman Hetong Guo ("Mr. Guo"), incurred
RMB250 million in debt with two trust funds; (ii) Mr. Guo's shareholding in the Company and the revenue of the Company were pledged as collateral to secure the debt; and (iii) the Company failed to include LE's
RMB250 million debt in the Company's consolidated financial statements for the year ended
December 31, 2013.
All of these statements are false and potentially misleading. As the Company's annual report clearly disclosed, while LE is controlled by Mr. Guo, LE is not part of the Company. Any loan incurred by LE that does not impose any obligations or liabilities on the Company or its assets is not required to be disclosed. Mr. Guo has confirmed that LE incurred one loan with one trust fund in the amount of
RMB150 million in
January 2014, and this loan does not impose any obligations or liabilities on the Company and its assets. Neither Mr. Guo's equity interest in the Company nor the revenue of the Company is pledged as collateral to secure this loan. Based on the above, the Company is not required to disclose this loan or include it in the consolidated financial statements for the year ended
December 31, 2013. The Company believes that it has made full and accurate disclosure in its annual report on Form 20-F for the fiscal year ended
December 31, 2013 in accordance with the rules and regulations under the U.S. securities law.
The Company also announced that in view of the recent unusual market activity in the Company's American depositary shares ("ADSs"), the New York Stock Exchange ("NYSE") has contacted the Company in accordance with the NYSE's usual practice. The Company confirmed to the NYSE that it is not aware of any material corporate developments beyond its most recently issued news releases and annual report that could account for the recent unusual trading activity in its ADSs.