Capital Research Group measures potential shareholder claim MIAMI, Sept. 30
MIAMI, Sept. 30 /PRNewswire/ -- Capital Research Group, Inc. (CRG) and
Capital Research Group Partners, Inc. (CRGP) have filed a $13 Million
arbitration case against Genesis Pharmaceuticals (OTC Bulletin Board: GNPH),
formerly Genesis Technology Group or GTEC. Genesis Technology is currently a
wholly owned subsidiary of Genesis Pharmaceuticals (OTC Bulletin Board: GNPH),
now operating as Genesis Holdings.
Since 2003, CRG & CRGP through a myriad of successive contracts acted as a
premier consultant to GTEC or Genesis. CRG & CRGP, through its significant
associations, expertise and reputation, was the driving force behind the
emergence of GTEC, from a small unknown start-up, to a profitable and
noteworthy operation that became an admirable acquisition target by a Chinese
pharmaceutical giant.
CRG & CRGP state... GTEC violated the 10 percent share issuance and
registration clause of the standard consulting agreement by issuing and
registering over 300 million additional shares, and not compensating CRG &
CRGP under this and other agreements ultimately diluting CRGP's position by
almost 500 percent. Since October 4, 2007 GTEC has authorized an additional
800 million shares.
The $13 million arbitration has a hearing date set for December 1, 2008.
Peter Antipatis, CRGP Director, observed, "Genesis has crossed the line
by not honoring our contract, which former CEO Gary Wolfson, now GTEC Holdings
CEO, sought out time and time again over the course of five years. CRG & CRGP
fostered GTEC's business model and advised GTEC on several capital campaigns
that garnered several million dollars for GTEC. We created both a marketing
curriculum and a quality investor relation program that increased the market
cap 800 percent on several campaigns."
Antipatis further said, "We forged a new business model for GTEC by
helping their client companies reach public company status. Such examples are
Lotus, Gold Horse and China Wind Systems. We know that the benefits to
Genesis shareholders should be a dramatic increase in shareholder valuation
and this dilution and refusal to honor our contracts is contributing to the
contrary."
"We made several trips to China, visiting GTEC companies, lobbying
potential and current clients, as GTEC's largest shareholders as well as
corporate directors to help the company survive during its darkest hour. GTEC
was able to gain contracts through the Capital Research reputation and rich
legacy to obtain sustainable profitability and in turn consummate the merger
with the Chinese pharmaceutical company. GTEC officers did extremely well,
but the shareholders, and CRG & CRGP, included continue to suffer," said Mr.
Antipatis.
Representing the plaintiff:
Jeff Tew
Tew Cardenas LLP
Four Seasons Tower, 15th Floor
Miami, Florida 33131
305-536-8452
jt@tewlaw.com
Representing the defendant:
Ben Olive
Olive & Associates
2438 E. Las Olas Blvd.
Fort Lauderdale, Florida 33301
954-334-2250
info@olive-law.com
Furthermore, in addition to the arbitration case, Capital Research Group
will hold a shareholder caucus, via teleconference on October 15, 2008 at 12
pm EDT. The purpose of this teleconference and online gathering will be to
discuss the prospect of potential shareholder litigation against Genesis
Pharmaceutical Enterprise, GTEC current and past directors and GTEC Holdings.
Agenda items will include, but will not be limited to as follows.
1. Current and past corporate officers may have engaged in schemes to
divert cash and assets from GTEC and conceal self-dealings from fellow
director's and GTEC public shareholders.
2. Activity of current and past officers may have been reckless and
possibly did not fulfill their fiduciary obligations. Officers may have
engaged in a covert defalcation of corporate funds.
3. GTEC possibly failed to disclose or publicize the failure or loss of
corporate contracts and potentially failed to disclose in the Management's
Discussion and Analysis ("MD&A").
4. GTEC officers may have acted recklessly by creating a series of shadow
companies that would operate as GTEC in China such as Genesis Equity Partners
Capital Group, Pacific Rim Consultants Inc. and Shaohua Tan and Partners, Inc.
5. Officers may have self-dealt contracts for their own personal benefit
through shadow companies with identical or similar names to GTEC, and or
subsidiaries such as Genesis China and Genesis Equity Partners LLC (GEP).
6. GTEC officers through self-dealing may have violated their fiduciary
obligations and may have been reckless by commandeering the following
contracts which together are in value over $20 million. Huyang Electric Co.
LTD (GREEN POWER) now China Wind Systems, Western China Energy Company
(ZHONGDA), Sino Steel (SITE), and Lizzie Gardens (LG).
7. Moreover, in October 2007, Genesis Chairman and CEO Gary Wolfson wrote
a letter to shareowners of GTEC in which he may have mislead the investing
public about his intentions and role with Genesis Pharmaceuticals, GTEC
Holdings, corporate dividends, and contracts.
8. Officers may have breached their fiduciary duty to shareowners and the
GTEC Board of Directors by failing to disclose conflicts of interest.
The teleconference will be forum to determine potential indemnity, discuss
shareholders rights and other items and behaviors of interest that will be
determined from the arbitration discovery process. If you would like to
participate on the conference call, please send an email to
GenesisLawSuit@Gmail.com. In the email, please include your full name, address
and the phone number you will be calling in from. Only these numbers will be
permitted to join the call. If you have a mechanism that blocks caller ID,
please disable it or utilize a different number.
Safe Harbor Statement
Certain statements set forth in this press release constitute
"forward-looking statements." Forward-looking statements include, without
limitation, any statement that may predict, forecast, indicate, or imply
future results, performance or achievements, and may contain the words
"estimate," "project," "intend," "forecast," "anticipate," "plan," "planning,"
"expect," "believe," "will likely," "should," "could," "would," "may," or
words or expressions of similar meaning. Such statements are not guarantees of
future performance and are subject to risks and uncertainties that could cause
the company's actual results and financial position to differ materially from
those included within the forward-looking statements. Forward-looking
statements involve risks and uncertainties, including those relating to the
Company's ability to grow its business. Actual results may differ materially
from the results predicted and reported results should not be considered as an
indication of future performance. The potential risks and uncertainties
include, among others, the Company's limited operating history, the limited
financial resources, domestic or global economic conditions -- especially
those relating to China, activities of competitors and the presence of new or
additional competition, and changes in Federal or State laws, restrictions and
regulations on doing business in a foreign country, in particular China, and
conditions of equity markets. More information about the potential factors
that could affect the Company's business and financial results is included in
the Company's filings, available via the United States Securities and Exchange
Commission.
SOURCE Capital Research Group Partners, Inc.
