10.01.2014
KINGHERO AG: Accusation of breach of trust against former Chairman of the Board Zhang Yu
Wiesbaden, 10 January 2014 - In the course of its restructuring measures the German Management Board of KINGHERO AG obtained reliable information and documents proving that Mr. Zhang Yu, former Chairman of the Board of KINGHERO AG and currently manager of its Chinese subsidiaries Kinghero Fashion (Xiamen) Co. Ltd. and Xiamen Michelle Co. Ltd., has used assets of the KINGHERO Group as collateral for personal business activities.

On behalf of the subsidiary Xiamen Michelle, Mr Zhang Yu transferred contrary to duty 25 per cent of the shares of its subsidiary Kinghero Fashion to a private person in the beginning of 2013.

Legal proceedings against Mr. Zhang Yu and the subsidiaries are ongoing in China. In this respect Mr. Zhang Yu is said to have issued guarantees on behalf of the subsidiaries Kinghero Fashion (Xiamen) Co. Ltd., which generates most of the operating business, and Xiamen Michelle Co. Ltd. for his private business activities. Currently, the Chinese subsidiaries do not fulfil their obligations from the guarantees that were issued.  For the German management and for the Supervisory Board of KINGHERO this circumstance suggests that the companies do not dispose of sufficient liquid funds.

To this day, evidence for the cash funds of the Chinese subsidiaries has not been provided, as Mr. Zhang Yu currently does not meet his duties as the manager of the Chinese subsidiaries and cannot be reached anymore.

The Management Board and the Supervisory Board of KINGHERO AG will take all steps which can be taken by them in order to cancel the collateral and to avoid any further damage to the company. Furthermore, legal steps against Mr. Zhang Yu are being assessed.

distributed by