Egana counters claims
LUXURY watch maker Egana International has countered claims that material facts were omitted from its listing prospectus in June 1993.
In a writ issued by Playboy Enterprises last year it was claimed, by Playboy, a 90-day deletion notice removing China from a licence issued in March, 1993.
According to the writ this deletion became effective on June 28, three days after Egana listed on the Hong Kong stock exchange.
Playboy is suing Egana for the alleged distribution of products in China after June 28, the date of the deletion of that country from the licence.
Later, on February 2, 1994 the overall licence was terminated and the writ was issued a month later.
In a statement yesterday Egana said Playboy's assertion regarding the deletion of China from the licence was contrary to Egana's understanding.
Egana claimed the notice to delete China from the licence was withdrawn at a meeting between the parties prior to the listing of Egana.
'The parties are consequently in litigation over an issue which did not appear to be an issue at all at the time of listing.
'The directors of Egana therefore confirm that the prospectus dated June 8, 1993 was correct and accurate at the time of its issue and was not misleading in any way,' said Egana director Peter Lee.
Mr Lee added: 'The directors wish to make it quite clear that at the time of the listing of Egana there was not the slightest doubt in the minds of any directors of Egana that the People's Republic of China was still within the territory covered by the trademark licence between Egana's group company Eco Swiss Haru Mfr Corp and Playboy.' He said therefore Egana continued to treat it as being within the licence.
Playboy, in its writ, alleges the deletion of China from the licence was prompted by Egana's failure to meet minimum requirements, some of which were linked to sales, under the licence agreement. This thereby triggered the deletion under a 90-day notice.
In the writ, Playboy alleges for the licence year from March 1, 1992, to February 28, 1993, the licensee's net sales for China were less than the minimum net sales figure specified in the schedule for China for that licence year.
Playboy said, in the writ: 'By reason of the matters pleaded, the plaintiff had the right to delete China from the territory upon giving 90-days written notice.
'Pursuant to and in accordance with such right, by a letter dated March 25, 1993, sent to the defendant at its principal place of business by facsimile transmission followed by a copy sent by pre-paid certified post, the plaintiff gave to the defendant 90-days written notice to delete China from the licence/territory.
'In the premises, on or about June 28, 1993, China was deleted from the licence or ceased to be a country within the territory covered by the licence.' Egana's share rose one cent yesterday to $1.01, on a turnover of $6.42 million.
The share has been rallying since early May, rising from 87 cents on May 2, up 16 per cent.