ARC Capital Holdings Limited Claim against Investment Manager - Replacement (3247P)
August 15 2014 - 11:19AM
UK Regulatory
TIDMARCH
RNS Number : 3247P
ARC Capital Holdings Limited
15 August 2014
The following amendment has been made to the 'Claim against
Investment Manager' announcement released on 15 August 2014 at
16:45 under RNS No 3206P.
The date of the announcement has been changed from 18 August
2014 to 15 August 2014.
All other details remain unchanged.
15 August 2014
ARC Capital Holdings Limited
Claim against the Investment Manager
On 6 February 2014, ARC Capital Holdings Limited (the "Company")
announced a possible claim against ARC Capital Partners Limited
(the "Investment Manager") arising out of the transfer procured by
the Investment Manager of RMB 480 million (the "Orient Home
Payment") under an Equity Purchase Agreement (the "Agreement") for
the purchase of a majority stake (the "Consideration Shares") in
Orient Home Industrial Co., Ltd ("Orient Home Industrial"). The
Orient Home Payment was made to Orient Home Co Limited ("Orient
Home Co"), a controlled affiliate of the Orient Group. The Orient
Home Payment represented the full purchase price for the
Consideration Shares under the Agreement. Following the making of
the Orient Home Payment the conditions precedent to completion of
the transaction set out in the Agreement were not satisfied.
Accordingly, Orient Home Co became liable to repay the Orient Home
Payment, but no repayment has been forthcoming.
The Board believes that the Investment Manager acted negligently
and/or breached its investment management agreement with the
Company (the "IMA") in entering into the Agreement on the terms
that it did and/or in making the Orient Home Payment. The Board has
come to this view on the basis that the Orient Home Payment (which
was the full consideration of RMB 480 million payable under the
Agreement for the purchase of the Consideration Shares) was
released to Orient Home Co, without any security or escrow
arrangements, and on the basis only of a contractual promise from
Orient Home Co to transfer all of the Consideration Shares at a
future date if all of the conditions precedent set out in the
Agreement were satisfied or, if they were not satisfied, to return
the money.
The Company and the Investment Manager have been engaged in
pre-action correspondence since February 2014. On 17 June 2014, the
parties entered into a short standstill agreement.
The exchange of correspondence has however not led to a
resolution of the dispute. Having considered the position with its
legal advisers, the Board announces that the Company has now issued
legal proceedings against the Investment Manager for negligence
and/or breach of the IMA. The Company is claiming damages in the
sum of RMB 480 million for the loss of the Orient Home Payment and
other losses, including the professional fees and other costs the
Company has incurred in attempting to secure repayment of the
Orient Home Payment from Orient Home Co.
For more information, please contact:
ARC CAPITAL HOLDINGS LIMITED:
Steve Feniger, Chairman of the Board
E: steve.feniger@gmail.com
NOMINATED ADVISER:
Philip Secrett
Grant Thornton UK LLP
T: (44) 20 7383 5100
E: Philip.J.Secrett@uk.gt.com
BROKER:
Numis Securities Limited
David Benda / Hugh Jonathan
T: (44) 20 7260 1000
F: (44) 20 7260 1001
E: d.benda@numiscorp.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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