Who are you?

We are shareholders and investors of LKM.

Why are you doing this?

We are doing this because it is the right thing to do. Too often, particularly with China based companies listed on U.S. exchanges, shareholder capital is diminished due to fraudulent accounting, management buyouts at prices well below value and other schemes to transfer investor capital away from investors and to management and other insiders. In the case of LKM, these schemes were taken to a new level. A very solvent company with a very promising future was delisted without any payment to shareholders who were and are the owners of the company. Even before delisting, we petitioned management to cease and desist from these actions, but our petition was completed ignored. Management, working under the assumption they would not be pursued by investors, continue to this day with conduct detrimentally to the owners of the Company, its investors. We reject this assumption and managements’ conduct and will continue to pursue this matter to its logical conclusion, whatever that may be.

Why is this taking so long?

As indicated in our 1/15/2020 update, we are simultaneously engaged in legal matters in four independent jurisdictions: China, Hong Kong, United States and Cayman Islands. Each jurisdiction moves at its own pace. Unfortunately, due to the corporate structure of LKM, Inc. it is necessary, from a legal standpoint, to pursue legal action is all four jurisdictions. Additionally, our opponents are contesting our actions in all jurisdictions. Consequently, we must engage and defeat these parties in all jurisdictions to maximize our actions for asset recovery for shareholders.

Why isn’t the SEC involved in this matter?

We have filed whistle blower claims with the SEC and continue to update them on the status of our matter. The SEC does not comment on ongoing investigations. Therefore, we do not know if the SEC is pursuing this matter, but we have made every attempt to prompt them in this regard. To that end, you can also file an independent claim with the SEC on this matter which documents your claim regarding LKM. SEC.gov, Division of Enforcement, has a Tips & Complaints form that any investor can complete and send via web transmittal.

Why isn’t the U.S. Government investigating delisting of China based companies on U.S. Exchanges?

We have reached out to both congressional representatives and U.S. Senators regarding the egregious conduct exhibited toward U.S. investors by LKM, Inc. To date, we have received limited response. While LKM is perhaps the most egregious example of China based companies utilizing the NYSE or NASDAQ to abscond with investor capital and move this capital to China, it is definitely not the only instance of this conduct. We believe the conduct exemplified by the LKM saga creates a significant risk to securities markets in the United States. This is an election year. We urge all LKM investors in the United States to reach out to your elected representatives and request they immediately commence an investigation of LKM and the safeguards, or lack thereof, for investors who invest in China based listed securities on the NYSE and NASDAQ.

Is this really the best way to resolve the ongoing conflict?

Litigation should be a last resort in resolving conflict. It is long, complicated and expensive. Prior to litigating this matter and petitioning for the appointment of a receiver, we made numerous attempts to dissuade management from pursuing policies and actions that were detrimental to shareholders. These attempts were met with no response. Negotiation only works when both parties are open to the process and are willing to acknowledge laws, rules and regulations that govern their conduct. To date, our opposition has shown no indication they are willing to play by these rules, and no indication they are willing to restore shareholder value through a negotiated process. While we are always open to full and fair negotiation to restore shareholder capital, based on our opposition’s conduct to date, litigation must and will continue.