The Board of Directors of Qian Hu Corporation Limited ("the Company") wishes to inform that Qian Hu Marketing Co Ltd ("QHMC"), the Company's subsidiary in Thailand, has not been able to obtain a Foreign Business Licence to undertake the business of distributing pet food and accessories in Thailand (the "Thailand Distributing Business").
The Company has instructed an international law firm practising in Thailand to advise the Company on the restructuring of QHMC to enable (i) QHMC to undertake the Thailand Distributing Business without a Foreign Business Licence and (ii) for the Company to maintain effective control of QHMC. The Company's lawyers in Thailand have advised the Company to hold shares directly in QHMC and via a new Thai holding company to be set up. Under the new structure, QHMC will be 51 per cent. owned by a Thai holding company, whose issued share capital will be held in the ratio of 49 per cent. by the Company and the balance 51 per cent. by a Thai party. The remaining 49 per cent. of QHMC's issued share capital will be held directly by the Company. Under such a structure (the "New Thai Structure"), the Company's lawyers in Thailand have advised that no Foreign Business Licence is required to be obtained for QHMC to undertake the Thailand Distributing Business. Thai lawyers are in the process of undertaking the restructuring and the Company will expeditiously make further announcement(s) on any development in relation to the proposed New Thai Structure.
QHMC will only undertake the Thailand Distributing Business after it is legally permitted to undertake such businesses in accordance with Thailand laws and regulations. QHMC's suspension of the Thailand Distributing Business pending its due compliance with Thai laws and regulations will not have any impact whatsoever on the consolidated turnover and profits of the Company and its subsidiaries for the financial year ended 31 December 2000 and for the current financial year ending 31 December 2001.