Zungui Haixi Corporation

Zungui Haixi Corporation

September 23, 2011 08:31 ET

Zungui Haixi Announces Resignation of Independent Directors and Chief Financial Officer

TORONTO, ONTARIO--(Marketwire - Sept. 23, 2011) - Zungui Haixi Corporation (TSX VENTURE:ZUN) (the "Company"), a China-based manufacturer of sportswear and casual footwear, announced that it has received the resignations of the independent directors and the Chief Financial Officer.

On August 28, 2011 a Special Committee of independent directors of the Company was appointed to investigate concerns raised by the Company's auditors. On September 16, 2011 the Special Committee announced that it had retained KPMG and legal advisors and advised that it was not then able to provide guidance as to the expected timing of its work because it was not clear whether the cooperation or funding necessary to undertake its investigation would be provided or authorized by Yanda Cai, the CEO and a director of the Company.

In spite of numerous requests for cooperation, there has been no positive response from Mr. Cai. The requests for cooperation (which the Board unanimously supported when it resolved to appoint the Special Committee) have included two directors travelling to Hong Kong to meet with Mr. Cai, as well as other email and oral communications. These efforts have not led to the access required to conduct a meaningful investigation or the transfer of funds to Canada to allow the Special Committee to pursue its mandate, nor has there been any indication that such cooperation or funding will be forthcoming. As a consequence, the Special Committee has concluded that it is prevented from fulfilling its mandate and each of the four independent directors (Michael Manley, Patrick Ryan, Margaret Cornish and Elliott Wahle), as well as the Chief Financial Officer, Shelly Gobin, have resigned. Before doing so, the Special Committee took steps to secure those documents and records available to the Company at its Canadian office.

About Zungui Haixi

Zungui Haixi Corporation, through its wholly owned subsidiaries, is engaged in the manufacture and sale of athletic footwear, apparel and accessories, and also casual footwear, in the People's Republic of China. Both product lines are marketed under the ZUNGUI brand. Zungui Haixi distributes its products to consumers throughout China through an extensive network of retail outlets which exclusively carry ZUNGUI branded products. There are 62,028,800 common shares issued and outstanding. The corporate website is www.zunguihaixi.com.

Caution Regarding Forward-Looking Statements

Certain statements in this press release contain forward-looking information that involve risk and uncertainties. Statements other than statements of historical fact contained in this press release may be forward-looking statements within the meaning of certain securities laws, including, without limitation, statements involving management's expectations, intentions and beliefs concerning the domestic PRC sportswear industry, the competitive landscape in this industry and the general economy, statements regarding the future financial position or results of the Company, business strategies, proposed acquisitions, growth opportunities, budgets, litigation, projected costs and plans and objectives of or involving the Company. Such statements should be considered forward-looking statements, Wherever possible, words such as "may", "would", "could", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "project", "continue" and similar expressions have been used to identify forward-looking statements.

These forward-looking statements reflect management's current beliefs and business judgement with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions, and you should not place undue reliance on these forward-looking statements. Although management believes its current beliefs and assumptions are reasonable, many factors could cause Zungui's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation, those listed in the "Risk Factors" section of the Company's other filings with Canadian securities regulatory authorities at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this press release. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as of and speak as of the date of this press release and the Company does not intend to, or assume any obligation to, update or revise these forward-looking statements to reflect new information, events, results or circumstances or otherwise after the date on which such statement is made as to reflect the occurrence of unanticipated events, except as required by law, including securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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