Who are you?
We are long suffering investors just like all of you.
Why are you doing this?
Because we do not want to stand on the sideline and watch our hard earned nest egg go to zero. It is apparent to us that the current management team and the board of directors have completely abandoned their fiduciary duty to shareholders. So it is now up to us, the regular shareholders, to do what we can to salvage the situation. Mr. Matt Mathison in his open letter on October 10th(see blog post) pointed out a pathway for us to move forward and take control of the situation. We are doing just that, rising up and taking over.
When will LKM file 2017 20F?
We do not know. What we do know is that the ongoing public feud between LKM/NQ's co-founders must be isolated to these individuals and completely separate from LKM corporate before an audit opinion can be issued and 2017 20F signed and filed.
Can auditors demand management changes?
No, and that is NOT what Marcum(auditor) is asking. NQ's co-founder, former Chairman and major shareholder(via his wife's beneficial holding in RPL)Henry Lin recently launched a very public campaign against Vincent Shi in the Chinese media. Lin has made serious allegations against Vincent Shi, accusing him of both ethical and criminal wrong doings. In an annual report, auditors not only have to attest to the accuracy of the underlying financial statements, but they also have to make an assessment of management's integrity. Marcum, as an auditor does not have the ability, nor authority to launch investigation into Lin's claims and clear Shi's reputation. As such, it is in the benefit of everyone and the Company for Shi to, at least temporarily, suspend all professional relationship with Link Motion, so that the auditors can proceed with the 20F.
What is RPL Holdings?
RPL is an offshore investment holding company setup by NQ's three co-founders to hold all of their Class B super voting shares. It holds roughly 10 million ADR equivalent of Class B shares. Henry Lin in 2016 transferred his beneficial ownership in RPL to his wife, Linyun Guo. Guo is a current board member of Link Motion.
What happened to Zhongzhi's convertible bond that was on Oct 1st?
We are now past the due date and LKM has not paid the USD denominated note. So, the company is in technical default. We have spoken to Mr. Mathison regarding this issue. The explanation given was that the Company had ample liquidity(in RMB) to pay back the note, but needed additional time to manage its fx exchange process.
I have submitted my shares, what now?
We are still in the early stage of collecting votes. Once we have reached the required threshold, an official requisition for shareholders meeting will be sent to Link Motion's Board. In the meantime, we are working with another significant and strategic partner. When the time is right, more information will be provided. Thank you all for your support.
Is this really the best way to resolve the ongoing conflict? Wouldn't a negotiated settlement among all parties the best solution going forward.
No, and Yes. We believe a negotiated settlement is the best solution, and a requisition to vote out current directors the last resort. We are moving forward with this action to put pressure on the Board and the Management to do the right thing. If we can effect a positive outcome for all shareholders without a shareholder meeting. That would be great. If not, then this is our last resort to protect our interests. By moving forward with this process, until the actual day of shareholder meeting, negotiations in parallel can still go on.