Beijing--(BUSINESS WIRE)--Shao Baiqing ("Mr. Shao") and Ace Lead Profits Limited ("Ace Lead") jointly form Hollysys Automation Technology Co., Ltd. (NASDAQ: HOLI) ("and The third-largest shareholder of "Nesco" or "Company") has filed a legal action against Hollysys in the Commercial Court of the Eastern Caribbean Supreme Court of the British Virgin Islands Territory on February 1, 2021. In the lawsuit, Mr. Shao and Ace Lead sought a court decision: Hollysys' recent amendments to the company's memorandum and articles of association were invalid and overturned the amendment, and the company was prohibited from restricting shareholders to amend the company's organization in any way based on the amendment. The rights or interests of the memorandum and/or articles of association. In addition, Mr. Shao and Ace Lead also sought to prohibit the company from amending the company's memorandum of association and articles of association to restrict shareholders' rights or interests through the lawsuit.
Statement of the buyer group on the lawsuit
As stated in the press release issued by the buyer group ("buyer group") formed by Mr. Shao, Ace Lead and CPE Funds Management Limited on January 13, 2021, the buyer group has taken the most severe and coercive actions against the company and violated shareholders. Shocked by the way in which the interests of diversification acted. For example, (i) within one week after receiving the original acquisition proposal of the buyer group, Hollysys deprived Mr. Shao of the position of chairman of the Ningbo Hollysys subsidiary for no reason and in violation of Mr. Shao’s employment agreement, (ii) Hollysys rejected the original acquisition proposal without any contact with the buyer group, and (iii) Hollysys passed the outrageous (and possibly illegal) company memorandum and articles of association amendments in order to deprive shareholders of rights And solidify the position of the board of directors. At present, despite the attractive premium of our revised offer price of $17.1 per share, the company’s board of directors still advocates that shareholders do not need to “take any action” at this time, and has not provided a timetable for its review of the proposed new offer. We believe that unless shareholders take active and decisive actions to protect their rights, the company's board of directors will not be able to fulfill its fiduciary duty. In view of this, Mr. Shao and Ace Lead, as the company’s long-term shareholders, filed a lawsuit against Hollysys. This lawsuit is the first case involving a US-listed Chinese concept company in the British Virgin Islands.
Shareholders will not sit back and ignore the bad behavior of the company, and will not tolerate the company's fundamental transfer of the rights and interests of shareholders under its articles of association from the company's shareholders to the five current directors, and at the same time restrict the shareholders' right to nominate or remove any directors . Shareholders will not tolerate any attempt by the board of directors to deprive shareholders of their basic rights, nor will they allow the board of directors to arbitrarily attack shareholders who dare to question the worrying situation of the company's stock price downturn and continued decline in financial performance. We encourage other shareholders to take active actions and show to the solidified board of directors that they are "unbearable" and that shareholders should have the right to quickly realize the liquidity of their shares through attractive premiums!