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SOURCE L & L Energy, Inc.
SEATTLE, Oct. 7, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with energy (coal) operations in China, today released additional information to refute the recent defamatory article by short-seller firm, GeoInvesting. In addition to contracts, legal opinions and other supportive evidence already produced, the Company has collected additional documents refuting allegations that its Hong Xing's coal washing facility ("Hong Xing") was shut down since 2012 and produced no revenue. The Company has collected the following documentation and explanatory material, which will be also shared with the proper authorities.
- During the period in question, L&L operated two (2) washing facilities, Hong Xing and TaiFung. During fiscal 2013, Hong Xing washing only represented approximately 20% of consolidated total company sales (not 39% as alleged by GeoInvesting), while TaiFung washing represented approximately 19% of company sales. As previously disclosed, the Company idled Hong Xing plant this summer to redirect its capital investment to fulfill a large wholesale supply agreement with Datang. The Company has submitted a monthly sales analysis to auditors that reflects the reduction of activity at Hong Xing from May to June 2013. Hong Xing ceased operations as of June 30, 2013 and produced no revenue in July 2013.
In addition, GeoInvesting's allegation that they "sent [a] representative to visit the Shizong County Local Tax Bureau, Second Branch [and t]he local tax bureau confirmed that the Hong Xing Coal Washing Factory paid less than RMB 30,000 to the Shizong County Local Tax Bureau," fundamentally misrepresents how Chinese tax collections operate. Hong Xing pays taxes to the proper Chinese authorities for its sales. The Shizong County Local Tax Bureau, Second Branch ("Second Branch") is a county tax agent that is only responsible for the county's special surcharges and taxes, including local education and construction surcharges. The surcharge amount is generally small.
Furthermore, L&L believes that the Second Branch refused to give any information to GeoInvesting's investigators. A certification received from the Second Branch states that it recently rejected a request from an unknown party to review Hong Xing's data. The requesting party failed to provide proper identification.
L&L will provide all relevant documentation, including the Second Branch's certification, to the proper authorities.
For further information, please contact:
L&L Energy, Inc.
+1 (206) 264-8065
Gary Dvorchak, CFA
Senior Vice President
U.S.: +1 (310) 954-1123
China: +86 (10) 6583-7528
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