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Since 2003, CRG & CRGP through a myriad of successive contracts acted as apremier consultant to GTEC or Genesis. CRG & CRGP, through its significantassociations, expertise and reputation, was the driving force behind theemergence of GTEC, from a small unknown start-up, to a profitable andnoteworthy operation that became an admirable acquisition target by a Chinesepharmaceutical giant.
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CRG & CRGP state... GTEC violated the 10 percent share issuance andregistration clause of the standard consulting agreement by issuing andregistering over 300 million additional shares, and not compensating CRG &CRGP under this and other agreements ultimately diluting CRGP's position byalmost 500 percent. Since October 4, 2007 GTEC has authorized an additional800 million shares.
The $13 million arbitration has a hearing date set for December 1, 2008.
Peter Antipatis, CRGP Director, observed, "Genesis has crossed the lineby not honoring our contract, which former CEO Gary Wolfson, now GTEC HoldingsCEO, sought out time and time again over the course of five years. CRG & CRGPfostered GTEC's business model and advised GTEC on several capital campaignsthat garnered several million dollars for GTEC. We created both a marketingcurriculum and a quality investor relation program that increased the marketcap 800 percent on several campaigns."
Antipatis further said, "We forged a new business model for GTEC byhelping their client companies reach public company status. Such examples areLotus, Gold Horse and China Wind Systems. We know that the benefits toGenesis shareholders should be a dramatic increase in shareholder valuationand this dilution and refusal to honor our contracts is contributing to thecontrary."
"We made several trips to China, visiting GTEC companies, lobbyingpotential and current clients, as GTEC's largest shareholders as well ascorporate directors to help the company survive during its darkest hour. GTECwas able to gain contracts through the Capital Research reputation and richlegacy to obtain sustainable profitability and in turn consummate the mergerwith the Chinese pharmaceutical company. GTEC officers did extremely well,but the shareholders, and CRG & CRGP, included continue to suffer," said Mr.Antipatis.
Furthermore, in addition to the arbitration case, Capital Research Groupwill hold a shareholder caucus, via teleconference on October 15, 2008 at 12pm EDT. The purpose of this teleconference and online gathering will be todiscuss the prospect of potential shareholder litigation against GenesisPharmaceutical Enterprise, GTEC current and past directors and GTEC Holdings.Agenda items will include, but will not be limited to as follows.
1. Current and past corporate officers may have engaged in schemes todivert cash and assets from GTEC and conceal self-dealings from fellowdirector's and GTEC public shareholders.
2. Activity of current and past officers may have been reckless andpossibly did not fulfill their fiduciary obligations. Officers may haveengaged in a covert defalcation of corporate funds.
3. GTEC possibly failed to disclose or publicize the failure or loss ofcorporate contracts and potentially failed to disclose in the Management'sDiscussion and Analysis ("MD&A").
4. GTEC officers may have acted recklessly by creating a series of shadowcompanies that would operate as GTEC in China such as Genesis Equity PartnersCapital Group, Pacific Rim Consultants Inc. and Shaohua Tan and Partners, Inc.
5. Officers may have self-dealt contracts for their own personal benefitthrough shadow companies with identical or similar names to GTEC, and orsubsidiaries such as Genesis China and Genesis Equity Partners LLC (GEP).
6. GTEC officers through self-dealing may have violated their fiduciaryobligations and may have been reckless by commandeering the followingcontracts which together are in value over $20 million. Huyang Electric Co.LTD (GREEN POWER) now China Wind Systems, Western China Energy Company(ZHONGDA), Sino Steel (SITE), and Lizzie Gardens (LG).
7. Moreover, in October 2007, Genesis Chairman and CEO Gary Wolfson wrotea letter to shareowners of GTEC in which he may have mislead the investingpublic about his intentions and role with Genesis Pharmaceuticals, GTECHoldings, corporate dividends, and contracts.
8. Officers may have breached their fiduciary duty to shareowners and theGTEC Board of Directors by failing to disclose conflicts of interest.
The teleconference will be forum to determine potential indemnity, discussshareholders rights and other items and behaviors of interest that will bedetermined from the arbitration discovery process. If you would like toparticipate on the conference call, please send an email [email protected]. In the email, please include your full name, addressand the phone number you will be calling in from. Only these numbers will bepermitted to join the call. If you have a mechanism that blocks caller ID,please disable it or utilize a different number.
Safe Harbor Statement
Certain statements set forth in this press release constitute"forward-looking statements." Forward-looking statements include, withoutlimitation, any statement that may predict, forecast, indicate, or implyfuture results, performance or achievements, and may contain the words"estimate," "project," "intend," "forecast," "anticipate," "plan," "planning,""expect," "believe," "will likely," "should," "could," "would," "may," orwords or expressions of similar meaning. Such statements are not guarantees offuture performance and are subject to risks and uncertainties that could causethe company's actual results and financial position to differ materially fromthose included within the forward-looking statements. Forward-lookingstatements involve risks and uncertainties, including those relating to theCompany's ability to grow its business. Actual results may differ materiallyfrom the results predicted and reported results should not be considered as anindication of future performance. The potential risks and uncertaintiesinclude, among others, the Company's limited operating history, the limitedfinancial resources, domestic or global economic conditions -- especiallythose relating to China, activities of competitors and the presence of new oradditional competition, and changes in Federal or State laws, restrictions andregulations on doing business in a foreign country, in particular China, andconditions of equity markets. More information about the potential factorsthat could affect the Company's business and financial results is included inthe Company's filings, available via the United States Securities and ExchangeCommission.Representing the plaintiff: Jeff Tew Tew Cardenas LLP Four Seasons Tower, 15th Floor Miami, Florida 33131 305-536-8452 [email protected] Representing the defendant: Ben Olive Olive & Associates 2438 E. Las Olas Blvd. Fort Lauderdale, Florida 33301 954-334-2250 [email protected]
SOURCE Capital Research Group Partners, Inc.
