BVI Company News

The story of a lawsuit in the BVI High Court that started last year has just received its continuation. In 2005 the company CBTL Holdings, that belongs to Mark Burby, a UK Jersey-based entrepreneur, filed an action against Smart Plus Investment Holdings, an offshore company registered in the British Virgin Islands. Directors and shareholders of the BVI company were Pengiran Ayub, a cousin of the Sultan of Brunei, and Pengiran Damit, the Sultan’s sister-in-law, as well as their business agent, Alice Koo. The cause of action was their reneging on the coffee shop deal.

The decision of the BVI High Court was in favour of CBTL Holdings; the court assessed damages at £46.9 million plus costs. Now it seems that the BVI company, belonging to the Sultan’s family members and their agent, failed to comply with the BVI court order. Smart Plus Investment Holdings is placed in liquidation. Now the liquidator appointed by the BVI court is investigating personal assets of company’s directors, with the intention to seize them.

Mr. Burby is a well-known British businessman which is said to have a personal fortune of £30m. He is a trained pilot whose private helicopter is used for maritime search and rescue.

Mr. Burby holds the UK franchise to The Coffee Bean & Tea Leaf – a popular US coffee chain. He alleged the Pengirans approached him in 2000 with an intention to invest £4.5 million (later £7 million) in the venture. But the funds did not materialize, which finally led to a lawsuit in the British Virgin Islands. To be continued…

One of the main shareholders of several China healthcare industry companies is Golden Meditech Company Ltd., incorporated on Cayman Islands.

Besides China Medical Technologies, Inc., whose shares are held by Golden Meditech (BVI) Company Ltd. (incorporated in the BVI), there are also
- Beijing Jingjing Medical Equipment Co. Ltd. – company engaged in the development, manufacturing and sale of hi-tech medical devices, 100% owned by Golden Meditech Company;
- Beijing Jiachenhong Biological Technologies Co. Ltd. – company engaged in providing Cord Blood Bank services, 51% owned by Golden Meditech;
- Qijieyuan Pharmaceutical Technology Development Co. Ltd. – company working in Chinese Herbal Medicine segment (most succesfull product - TangHerb), 51% owned by Golden Meditech
- Union China National Medical Equipment Co. Ltd. - engaged in the nationwide sale and distribution of medical equipment, from both foreign and domestic manufacturers, 37.8% owned by Golden Meditech.

The roots of Golden Medical Company go to 1990ies when Mr. Yuen Kam - the founder of the whole business – started to invest in research and development of the autologous blood recovery system. The Golden Meditech was incorporated in 2000, listed on Hong Kong’s GEM (Growth Enterprise Market) Board (8180.HK) in 2001 and the market capitalisation of Golden Meditech Company now is 3.18 billion HKD.

The main shareholder of Golden Meditech company empire is Bio Garden Inc. – the British Virgin Islands company, incorporated in accordance to BVI International Business Companies Act. Mr. Yuen Kam is the sole shareholder of Bio Garden Inc. – the BVI company with great power in Chinese hi-tech and unique medical and healthcare services sector.

Company strategy is strengthening core businesses and expanding product range and business segments through strategic merger and acquisition. One very good example mentioned by Mr. Yuen Kam is a company which Golden Meditech (BVI) Company invested back in 2003 and today it is known as the China Medical Technologies. China Medical Technologies was listed on NASDAQ in 2005, and its listing transformed $5 million investment into approximately $100 million, representing 20-fold increase in value to shareholders.

China Medical Technologies, Inc. is a China-based medical device company that develops, manufactures and markets products in China using HIFU (High Intensity Focused Ultrasound), for the treatment of solid cancers and benign tumors as well as developing ECLIA (Enhanced ChemiLuminescence ImmunoAssay) system.

The Company was listed on the Nasdaq on August 10, 2005 when it raised US$96 million in IPO. From that time company’s shares have risen nearly 40 percent with some peaks at the beginning of this year at almost 300 percent. Its main competitors are Abbott Labs, EDAP TMS and GE Healthcare.

Recently the company has announced financial results for the fiscal year ended at March 31, 2006. The results indicate positive dynamics in revenues, and the increase of expenses seems manageable.

Total Net Revenues increased 70.9% to US$46.4 million, revenues from sales of the HIFU therapy system increased 39.1% to US$30.8 million, and revenues from sales of the ECLIA system increased 210.4% to US$15.6 million. HIFU therapy system sales and ECLIA system sales, accounted for 66.4% and 33.6% of the Company’s sales, respectively.

Cost of Revenues increased 71.1% US$13.8 million but Gross Margin remained at 70.3%, the same level as at fiscal year ended March 31, 2005. Operating expenses increased 178.7% to US$8.5 million, however by the percentage of revenues this increase was only 63.0%. Net Income for China Medical Technologies increased 68.1% to US$24.8 million for the fiscal year ended March 31, 2006.

It is interesting to note that this company engaged in Medical Instruments & Supplies industry has close relation not only to China but also to the British Virgin Islands. The main shareholders of China Medical Technology Inc are Chengxuan International Ltd. and its owner Mr. Xiaodong Wu, as well as Golden Meditech Company (BVI) Ltd. and its chairman and founder Mr. Yuen Kam. Both companies are incorporated in the British Virgin Islands and were holding up to 36% and 20% of China Medical Technology Inc at the moment of IPO. After IPO their share was reduced, but they rest among the main shareholders of the company.