BEIJING, March 28, 2011 /PRNewswire/ -- China Century
Dragon Media, Inc. (NYSE Amex: CDM) (the "Company"), today
announced that the Company's registered independent accounting
firm, MaloneBailey LLP ("MB") has formally resigned its engagement
with the Company as of March 22,
2011. In its resignation letter, MB informed the
Company that due to discrepancies noted on customer confirmations
and the auditor's inability to directly verify the Company's bank
records, they believe these irregularities may be an indication
that the accounting records have been falsified, which would
constitute an illegal act. Furthermore, MB's letter notes
that the discrepancies could indicate a material error in
previously issued financial statements. As a result, MB
stated that it is unable to rely on management's representations as
they relate to previously issued financial statements and it can no
longer support its opinions related to the financial statements as
of December 31, 2009 and 2008.
The Company intends to seek and retain a new auditor.
On March 23, 2011, the Company
received notification from NYSE Amex LLC ("Amex") of its intention
to delist the Company's common stock pursuant to Section 1009(d) of
the Amex Company Guide based on a determination that it is
necessary and appropriate for the protection of investors to
initiate immediate delisting proceedings. Based on Amex's
review of the resignation letter from MB, it determined that the
Company is not in compliance with Amex listing standards and is
therefore subject to immediate delisting. Specifically, the
Company is subject to delisting pursuant to Section 1003(f)(iii) in
that the Company's actions and inactions led to MB's resignation
and withdrawal of its audit opinions casting material doubt on the
integrity of the Company's financial statements, which were relied
upon by Amex; MB's withdrawal of its audit opinions and that its
opinions may no longer be relied upon constitutes a material
misstatement and a violation of Section 132(e); the withdrawal of
MB's audit opinions and that there are no current audited financial
information available for the Company as a result have caused the
Company's filings to be noncompliant with regulations of the SEC
and, thus, noncompliant with Section 1003(d); MB's withdrawal of
its audit opinions calls into question whether the Company actually
met the listing standards subjecting the Company to delisting
pursuant to Section 1002(e); and Amex states that, based on the
withdrawal of MB's opinions, the Company is not compliant with
Section 127. The Company has until March 30, 2011 a limited right to request an
appeal. If the Company does not request an appeal by then,
then the decision will become final and Amex will submit an
application to the SEC to strike the Company's common stock from
listing. If the Company requests an appeal, then such request will
stay a delisting action. The Company currently intends to
appeal the delisting determination. There can be no assurance that
the Company's request for continued listing will be granted.
The details of the Amex delisting notice is set forth in Item
3.01 of the Company's Form 8-K filed with the SEC on March 28, 2011.
The Company was also recently notified by the staff of the U.S.
Securities and Exchange Commission ("SEC") that it has initiated a
formal, nonpublic investigation into whether the Company had made
material misstatements or omissions concerning its financial
statements, including cash accounts and accounts receivable.
The SEC has informed the Company that the investigation
should not be construed as an indication that any violations of law
have occurred. On March 24, 2011, the
SEC served the Company a subpoena for documents relating to the
matters under review by the SEC. The Company is committed to
cooperating with the SEC. It is not possible at this time to
predict the outcome of the SEC investigation, including whether or
when any proceedings might be initiated, when these matters may be
resolved or what, if any, penalties or other remedies may be
imposed.
In light of these events, the Board of Directors of the Company
has formed a Special Investigation Committee consisting of
independent members of the Board of Directors to launch an
investigation with respect to the concerns of MB. The Committee is
authorized to retain experts and advisers, including a forensic
accounting firm and independent legal advisors, in connection with
its investigation. The Company does not intend to provide
further comment regarding the allegations until after the
conclusion of the Special Committee's investigation.
The Company expects that the filing of its Annual Report on Form
10-K for the year ended December 31,
2010 will be delayed until completion of the internal
investigation, engagement of a new auditor and audit of the
Company's financial statements. The Company is unable to
provide an estimated date of filing of the 10-K at this time.
About China Century Dragon Media, Inc.
China Century Dragon Media is a television advertising company
in China that primarily offers
blocks of advertising time on certain channels on China Central
Television ("CCTV"), the state television broadcaster of
China and China's largest television network. We
purchase, repackage and sell advertising time on certain of the
nationally broadcast television channels of CCTV. We assist our
customers in identifying the most appropriate advertising time
slots for their television commercials based on the customer's
advertising goals and in developing a cost-effective advertising
program to maximize their return on their advertising
investment.
Safe Harbor Statement
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. Forward-looking statements can be identified by
the use of forward-looking terminology such as "will," "believes,"
"expects," "anticipates" or similar expressions. Such information
is based upon expectations of the Company's management that were
reasonable when made but may prove to be incorrect. All of such
assumptions are inherently subject to uncertainties and
contingencies beyond our control and upon assumptions. Such risks
and uncertainties include, but are not limited to, the Company's
ability to complete an internal investigation in a timely manner;
the discovery of additional issues related to the Company's
accounting records which may extend the investigation; the ability
to engage a new independent auditor and file its Form 10-K for the
year ended December 31, 2010 within a
reasonable period; the Company's inability to adequately respond to
the SEC's investigation orders; the Company's inability to
efficiently deploy resources to manage the process or complete it
on a timely basis; adverse capital and credit market conditions;
and other factors detailed from time to time in the Company's
filings with the United States Securities and Exchange Commission
and other regulatory authorities. The Company does not undertake to
update the forward-looking statements contained in this press
release. For a description of the risks and uncertainties that may
cause actual results to differ from the forward-looking statements
contained in this press release, see the Company's most recent
Annual Report filed with the Securities and Exchange Commission
(SEC) on Form 10-K, and its subsequent SEC filings. Copies of
filings made with the SEC are available through the SEC's
electronic data gathering analysis retrieval system (EDGAR) at
http://www.sec.gov .
Contact:
George Duan
CFO and Corporate Secretary
US Cell: 224-208-8855
george@ss.ad.com
SOURCE China Century Dragon Media, Inc.
