FAB Universal (NYSE MKT: #$%$) (“FAB” or the “Company”), a worldwide distributor of digital media and entertainment, today announced the completion of the investigation of allegations raised by short sellers and repeated in civil complaints. On March 5, 2014, the Company announced that the Board of Directors had engaged Loeb & Loeb LLP (“Loeb”), which in turn retained FTI Consulting, Inc. and FTI Investigations LLC (collectively, “FTI”) as independent investigators, to investigate allegations that the Company’s kiosk business was overstated and that licensees were offered guaranteed returns. In addition, Loeb investigated allegations that the kiosks offered pirated content, that a subsidiary engaged in an undisclosed bond offering in the People’s Republic of China, and that the Chairman held an undisclosed controlling interest in the company that provided maintenance and other services to the kiosks located in Beijing.
Summary of Major Findings:
The allegations are specifically delineated in the reports and complaints. The following is a summary of the major findings of the investigation, keyed to those allegations:
• Cash in Banks Confirmed. FTI obtained direct bank confirmations or statements from the two banks holding more than 95% of the Company’s cash. The balances as of December 31, 2013 agreed with FAB’s financial records.
• No Evidence of Overstatement of Number of Kiosks in Beijing. The short sellers and litigants allege that FAB has overstated the number of kiosks that it has deployed in Beijing. One short seller claimed that he could find only a handful of kiosks from which a patron could download movies or music. FTI and Loeb conducted two rounds of surveys within Beijing in order to determine whether FAB’s statement that 3,954 kiosks had been deployed in Beijing was accurate. FTI and Loeb were provided a complete list, prepared by Huzhong Culture (“Huzhong”), the company that maintained the kiosks, of all such kiosks. FTI determined sample sizes fo
You people are unbelievable, open your eyes, they would not have been desisted if they were not a fraud they had 9 months to prove they weren't and couldn't instead of bashing Carnes because you were screwed by Fab management you should thank him they didn't take more of your money