VANCOUVER, April 22 /PRNewswire-FirstCall/ - Dragon
Pharmaceutical Inc. ("Dragon Pharma" or the "Company" TSX: DDD;
OTCBB: DRUG) announced today that a complaint regarding its
proposed merger with Datong Investment Inc was filed in the Circuit
Court of the Fifteenth Judicial Circuit for Palm Beach County, State of Florida, against the Company, and its
eight directors. Mr. Yanlin Han, a
director and Chief Executive Officer of the Company and its largest
stockholder, was also named as defendant in the lawsuit, along with
Datong Investment Inc. which is a company controlled by Mr.
Han.
The action was brought by Mr. Kwok-Bun
Ho, an alleged stockholder, on behalf of himself and all
others similarly situated, and relates to the proposed merger
contemplated by the Agreement and Plan of Merger dated March 26, 2010, by and among, the Company, Chief
Respect Limited, Datong Investment Inc., and Mr. Han (the
"Agreement"). The complaint alleges, among other things, that the
directors of the Company breached their fiduciary duties to
stockholders in connection with the proposed merger; that the
merger consideration of $0.82 per
share is inadequate; and that certain terms of the Agreement
relating to the non-solicitation provision and termination fee
unfairly benefit Mr. Han at the expense of the other
stockholders.
The complaint seeks, among other things, injunctive relief to
enjoin the Company and directors from consummating the proposed
merger, along with legal costs, including attorneys' and experts'
fees. The Company and its directors believe that the allegations in
the complaint are without merit and intend to vigorously defend
against the claims and causes of action asserted in this legal
matter.
Additional Information and Where to Find It
In connection with the proposed merger, the Company has filed
with the Securities and Exchange Commission (the "SEC") a Schedule
13E-3, and a preliminary proxy statement for the meeting of
stockholders of the Company to be convened to approve the merger.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, THE COMPANY'S
STOCKHOLDERS AND INVESTORS ARE URGED TO READ THE PROXY STATEMENT
(INCLUDING THE DEFINITIVE PROXY STATEMENT, WHEN IT BECOMES
AVAILABLE) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. When completed a final proxy statement will be
mailed to our stockholders. Investors and stockholders may obtain a
free copy of the proxy statement when it becomes available, and
other documents filed by us with the SEC, at the SEC's web site at
http://www.sec.gov. Free copies of the proxy statement, when it
becomes available, and our other filings with the SEC may also be
obtained from us. Free copies of our filings may be obtained by
directing a request to Dragon Pharmaceutical, Inc., 650 West
Georgia Street, Suite 310, Vancouver,
British Columbia, Canada V6B 4N9 Attention: Maggie Deng, Secretary.
The Company and certain of its directors, executive officers and
other members of management and employees may, under SEC rules, be
deemed to be "participants" in the solicitation of proxies from our
stockholders with respect to the proposed merger. Information
regarding the persons who may be considered "participants" in the
solicitation of proxies will be set forth in our proxy statement
relating to the proposed merger when it is filed with the SEC.
Information regarding certain of these persons and their beneficial
ownership of our common stock as of March
15, 2010, is set forth in our preliminary proxy statement
which was filed with the SEC on April 1,
2010. Additional information regarding the interests of such
potential participants will be included in the proxy statement and
the other relevant documents filed with the SEC when they become
available.
About Dragon Pharmaceutical Inc.
Dragon Pharmaceutical, headquartered in Vancouver, Canada, is a leading manufacturer
and distributor of a broad line of high-quality antibiotic products
including Clavulanic Acid, an API to combine with Amoxicillin to
fight resistance, and 7-ACA, a key intermediate to produce
cephalosporin antibiotics, and formulated cephalosporin antibiotic
drugs. To learn more about Dragon Pharmaceutical Inc., please visit
www.dragonpharma.com.
Safe Harbor Statement
This press release contains forward looking statements,
including but not limited to, that the claim raised is without
merit and, accordingly, that if approved by the shareholders the
proposed merger with Mr. Han will be acted upon and completed.
These statements are subject to certain risks and uncertainties
that could cause results to differ materially from those
anticipated in the forward looking statement. The belief that the
claim is without merit is based upon the Company's understanding of
the facts and preliminary advice of counsel as to the relevant
legal issues. If these assumptions are incorrect, the proposed
merger with Mr. Han may not proceed and the Company may be liable
to pay damages. Readers should not place undue reliance on forward
looking statements, which only reflect the views of management as
of the date hereof. The Company does not undertake the obligation
to publicly revise these forward looking statements to reflect
subsequent events or circumstances. Readers should carefully review
the risk factors and other factors described in its periodic
reports filed with the Securities and Exchange Commission.
SOURCE Dragon Pharmaceutical Inc.