Arko Energy Holdings PLC
30 June 2003
Arko Energy Holdings plc
CLARIFICATION PRESS RELEASE YEAR RESULTS 2002
The board of directors of the Company (the 'Board') refers to the Company's
announcement of 2002 annual results dated 26 June 2003 and wish to clarify the
following content appeared in the Announcement.
Reference is made to page 36 and 73 under Note 12 'Tangible Fixed Assets'
regarding to the pledge of plant and machinery and other equipment with a
carrying value of £11,063,812 to secure bank loan of Changzhou Power Development
Company Limited ('CZPD'), an indirect subsidiary of the Company, amounting to
£1,309,317. In view of the limited accounting records left behind by China Chang
Jiang Energy Corporation ('CCJEC') as mentioned in the acquisition document, a
more detail explanation on above note will give a better understanding of issue
to the readers.
In late 90s', China Chang Jiang Energy Corporation ('CCJEC') seized the control
and operation of CZPD. China International Economic and Trade Arbitration
Commission finally judged that the action of CCJEC was illegal. During the
period of illegal control of CZDP by CCJEC, it made use of deceptive or false
documents to obtain loan financing from a local bank amounting to RMB16,000,000.
However, the loan amount was subsequently transferred to CCJEC instead of
financing the operation of GZDP. As CCJEC retained all the accounting records
after it ceased the illegal control of CZDP, the recording of bank loan balance
of RMB15,810,000 in the financial statements was only based on the limited
As per the latest investigation result, both the pledge of assets and bank loan
are invalid. CZDP is now taking all necessary legal actions to recover all
previous payment in relation to the bank loan.
The above does not affect reported result.
We apologize for any confusion or inconvenience.
By Order of the Board
CHUNG Pan Hong, Terence
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