Xinhua Finance Media Board Authorizes $50 Million Share Buy Back
May 29 2007 - 8:41AM
PR Newswire (US)
Company Also Adopts Initiatives to Enhance Corporate Governance
SHANGHAI, May 29 /Xinhua-PRNewswire-FirstCall/ -- Xinhua Finance
Media ("XFMedia"; Nasdaq: XFML) announced today that its Board of
Directors has authorized a buy back of up to $50 million in shares
of its common stock. The Company will buy its shares in the open
market and expects the purchases to be funded from existing and
future cash reserves. XFMedia Chief Executive Officer Fredy Bush
said: "Our business and competitive position in China are as strong
as ever. Our Board is so confident of XFMedia's future that it has
authorized the company to repurchase up to $50 million of its own
stock, while also taking important steps to continue enhancing our
corporate structure and governance. We believe that XFMedia's stock
has been unduly punished in recent days and that buying back shares
represents an excellent investment at prevailing price levels --
especially in light of our strong first quarter results and
positive outlook. We also are pleased that we have available cash
to continue pursuing our vision of being the premier Chinese media
company. We remain intensely focused on creating value for our
shareholders by building world-class businesses in China and
adhering to and enhancing applicable standards of corporate
governance and transparency." In addition to this share buy back,
XFMedia and its parent, Xinhua Finance Limited ("XFL"; TSE Mothers:
9399; OTC ADRs: XHFNY) said they were taking a number of
initiatives to continue enhancing their corporate governance
policies as part of their ongoing efforts to achieve best practices
in corporate governance in each of the markets in which the
companies operate. Those enhancements include: -- Committing to
having a majority of independent directors on the Boards of both
XFL and XFMedia as soon as possible (even though, as a "controlled
company" under the relevant securities rules, XFMedia is not
required to do so); -- Committing to creating a lead independent
director position on the Boards of both XFL and XFMedia; --
Engaging Spencer Stuart, an internationally recognized executive
search firm, to identify world-class independent director
candidates for the XFL and XFMedia Boards; and -- Pursuing early
compliance with Section 404 of Sarbanes-Oxley at XFMedia, under the
direction and oversight of a new Internal Auditor to be appointed
by the Company. Ms. Bush added, "As Xinhua Finance and its
businesses have become more global, we have evolved our governance
practices to meet the standards of the new markets we have entered,
and our listing in the U.S. is no exception. XFMedia is currently
fully compliant with Sarbanes Oxley and other applicable
regulations, as they apply to us as a recently listed foreign
issuer. In some cases, we already exceed the regulatory
requirements for foreign issuers. Still, we recognize that there
are ways in which we can further improve our corporate governance,
and we will continue to pursue them as we build our business and
create value for our clients, our employees and our shareholders."
Ms. Bush also sent the following letter today to shareholders of
XFMedia: May 29, 2007 Dear fellow shareholders, As you probably
know, Xinhua Finance Media ("XFMedia") and its parent Xinhua
Finance Limited ("XFL") have been on the receiving end of some
particularly nasty and misleading press stories recently. I
appreciate the support that so many of you have expressed, and am
writing to you today in order to: -- Set the record straight with
respect to some of the unfair and inaccurate reports that have been
published about us; -- Let you know of some accelerated governance
improvements that we are implementing to enhance our corporate
structure and governance; -- Assure you that our business and
competitive position in China remain as strong as ever, as
evidenced by our strong first quarter results; and -- Let you know
that our Board is so confident of XFMedia's future that it has
authorized the company to repurchase up to $50 million of its own
stock. We believe that XFMedia's stock has been unduly punished in
recent days, and we are confident that buying back shares
represents an excellent investment at prevailing price levels. We
also are pleased that we have available cash to continue pursuing
our vision of being the premier Chinese media company. At Xinhua
Finance, we are strongly committed to achieving best practices in
corporate governance. It is important to understand that XFMedia is
a China company organized under Cayman law that is listed on the
NASDAQ Global Market in the U.S. Like its parent Xinhua Finance
Limited (which is listed on the Tokyo Stock Exchange), XFMedia has
to meet the regulatory requirements in several jurisdictions. China
has a uniquely complex legal regime - this is especially true for
media assets -- and one of the strengths of our company is that we
have the knowledge and long-term relationships necessary to succeed
in this business. Xinhua Finance Limited has grown from $18 million
in revenue in 2003 to $175 million in 2006. During this time, we
also have built, in XFMedia, a pioneering media company and created
substantial opportunities that have never existed before in the
China market. Clearly, the skills across these companies speak for
themselves and the fundamentals of our business remain strong. As
Xinhua Finance and its businesses have become more global, we have
structured our company to comply with applicable laws in China,
Japan, the U.S. and other jurisdictions, always in consultation
with highly-regarded independent legal counsel. We also have
evolved our governance practices to meet the standards of the new
markets we have entered, and our listing in the U.S. is no
exception. Indeed, the U.S. securities laws are designed to
facilitate that evolution, by giving new issuers additional time to
come into compliance with certain requirements of the Sarbanes
Oxley Act and other U.S. rules that are far more stringent that
those of other jurisdictions. We are currently fully compliant with
the Sarbanes Oxley Act and other applicable regulations as they
apply to a recently listed foreign issuer, and in some cases we
already exceed the regulatory requirements for foreign issuers. For
example, we voluntarily file quarterly financial information on
Form 6-K, and comply with requirements of Regulation FD, even
though foreign private issuers are not required to file quarterly
reports and are expressly exempt from Regulation FD. In addition,
our audit and compensation committees are fully independent, well
in advance of the deadline applicable to us under U.S. securities
laws. In keeping with our commitment to achieving best practices in
corporate governance, we recognize that there are always ways in
which governance can be further improved. To that end, XFMedia and
Xinhua Finance Limited are accelerating a number of enhancements to
our corporate governance practices as follows: -- We are committed
to having a majority of independent directors on the Boards of both
XFL and XFMedia as soon as possible (even though, as a "controlled
company" under the relevant rules, XFMedia is not required to do
so); -- We are committed to creating a lead independent director
position on the Boards of both XFL and XFMedia; -- We have engaged
Spencer Stuart, an internationally recognized executive search
firm, to identify world-class independent director candidates for
the XFL and XFMedia Boards; -- We are pursuing early compliance
with Section 404 of Sarbanes-Oxley at XFMedia and will be
appointing an Internal Auditor to oversee these efforts; and -- We
have established a committee to explore other ways in which we
might be able to enhance our corporate governance. We remain
committed to our vision of building world-class businesses in China
and adhering to and enhancing applicable standards of corporate
governance and transparency. As all thoughtful governance experts
acknowledge, this does not mean adhering to an ideal
"one-size-fits-all" standard, but doing what is right and
appropriate given the various jurisdictions where we are listed and
conduct business. In the process of assembling a collection of
high-quality media properties in China (where the underlying assets
are all government-owned) it was necessary and in the best interest
of our shareholders to contract with various parties including some
who were also early investors in or advisors to the company. Those
transactions were fair to the company, received all necessary
approvals at the board level and have proven to be very favorable
for the Company. Now that we are a NASDAQ-listed company, we are
utilizing special board committees (including a Corporate
Governance Committee composed of independent directors) and similar
procedural protections to not only ensure, but also to demonstrate,
the fairness of any such transactions. In the course of our IPO,
the most important consideration (for us and our first-tier
underwriters) was to ensure that the material details of those
transactions and relationships were properly described in our
prospectus. Several press reports have commented on the complexity
and "density" of our disclosures. It is true that our operations
are structurally complex - that is what it took to put these
quality Chinese media assets under one roof. XFMedia and our
underwriters, aided by world-class legal counsel, undertook an
intensive due diligence process and made great effort to describe
those transactions and relationships properly in connection with
the IPO. I am sure you will appreciate that, because the misleading
press reports have led to litigation, even if we consider it
baseless, we are somewhat constrained in our ability to comment on
every allegation and insinuation in the press - no matter how
outrageous. But we all believed and continue to believe that our
prospectus includes all material information that was required to
be disclosed. While my management team and I are not allowing
ourselves to be distracted from continuing to execute on our
business plan by refuting every unfounded claim, one media report
that I feel compelled to address is the recent suggestion that I
had granted myself shares in XFMedia. The fact is that the entire
ESOP allocation including my grant was approved by both of
XFMedia's shareholders at that time--its parent, Xinhua Finance
Limited, and an independent private equity shareholder. One last
point I wish to touch on concerns recent personnel changes at Glass
Lewis. The recent media onslaught was, after all, triggered by the
vague and sweeping disparaging remarks about Xinhua Finance and its
directors and officers made by a former reporter and Glass Lewis
employee, as he was leaving the firm, stating that he was joining a
Xinhua Finance competitor. This individual had given two weeks'
notice on May 2, "to pursue other opportunities". On May 16, he
sent his "amended resignation letter" purporting to state
previously undisclosed reasons for leaving, which he promptly
shared with colleagues in the press. The Glass Lewis team, led by
KT Rabin, continues to be the most thoughtful and talented group of
corporate governance professionals, and clients have made clear
that they continue to value and rely on their high quality work.
Despite the frustration of these misleading media reports, we
remain focused on running our business to create shareholder value,
which is why you invested in our company, and on thoughtfully
addressing the issues that have come out of this heightened focus
on the structure and governance of Xinhua Finance Limited and
XFMedia. Please do not hesitate to contact me if you wish to
discuss anything regarding the company or current developments. I
would also welcome any suggestions you would like us to consider as
we continue building XFMedia as the premier Chinese media company
and enhancing its corporate governance. I truly appreciate your
ongoing support. Sincerely, Fredy Bush CEO, Xinhua Finance Media
About Xinhua Finance Media Limited Xinhua Finance Media ("XFMedia";
Nasdaq: XFML) is China's leading diversified financial and
entertainment media company targeting high net worth individuals
nationwide. The Company reaches its target audience via TV, radio,
newspapers, magazines and other distribution channels. Through its
five synergistic business groups, Advertising, Broadcast, Print,
Production and Research, XFMedia offers a total solution empowering
clients at every stage of the media process and keeping people
connected and entertained. Headquartered in Beijing, the company
has offices and affiliates in major cities of China including
Beijing, Shanghai, Guangzhou, Shenzhen and Hong Kong. Xinhua
Finance Media Limited is a wholly owned subsidiary of Xinhua
Finance Limited. For more information, please visit
http://www.xinhuafinancemedia.com/ . Safe Harbor Statement This
announcement contains forward-looking statements. These statements
are made under the "safe harbor" provisions of the U.S. 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. Among other things, statements
made about proposed changes to personnel and reporting structures
and quotations from management in this announcement, as well as
XFMedia's strategic and operational plans, contain forward-looking
statements. XFMedia may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission 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 XFMedia's
beliefs and expectations, are forward-looking statements. Forward-
looking statements involve inherent risks and uncertainties. A
number of factors could cause actual results to differ materially
from those contained in any forward-looking statement, including
but not limited to the following: our growth strategies; our future
business development, results of operations and financial
condition; our ability to attract and retain customers; competition
in the Chinese advertising market; changes in our revenues and
certain cost or expense items as a percentage of our revenues; the
outcome of ongoing, or any future, litigation or arbitration; risks
associated with recent adverse press articles, the expected growth
of the Chinese advertising and media market; and Chinese
governmental policies relating to advertising and media. Further
information regarding these and other risks is included in our
registration statement on Form F-1, as amended, filed with the
Securities and Exchange Commission. XFMedia does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law. For more information, please
contact: China Joy Tsang Tel: +86-136-2179-1577 or +852-9486-4364
Email: United States Eric Andrus Tel: +1-646-805-2010 Email:
DATASOURCE: Xinhua Finance Media Limited CONTACT: Joy Tsang of
Xinhua Finance, +86-136-2179-1577, or +852-948- 64364, Eric Andrus
in US, Eric Andrus, +1-646-805-2010, Web site:
http://www.xinhuafinance.com/ http://www.xinhuafinancemedia.com/
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