BEIJING, Jan. 18, 2019 /PRNewswire/ -- Hexindai Inc.
(NASDAQ: HX) ("Hexindai" or the
"Company"), a fast-growing consumer lending marketplace
in China, today announced its rebuttal to the unsubstantiated
allegations of a short seller this week.
Hexindai believes that the allegations made contain numerous
errors and unsupported speculation. The Company intends to take all
appropriate legal actions to defend itself against the malicious
allegations and to protect the interest of its shareholders. In
response to the allegations:
- We stand by our financial reporting. We worked very
closely with Marcum Bernstein &
Pinchuk LLP for their audits of fiscal years ended March 31, 2017 and 2018, and their reports did
not contain an adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or
accounting principles. Moreover, on November
16, 2018, we announced that we had engaged Deloitte Touch
Tohmatsu ("Deloitte") as our independent registered public
accounting firm for the fiscal year ending March 31, 2019. We cannot comment on or speculate
as to what local reports or filings Bonitas is
referencing.
- We signed a cooperation agreement on November 19, 2018 with Shanxi Zhengxuan Finance
Guarantee Co., Ltd. ("Shanxi Zhengxuan"), which is controlled
by the State-owned Assets Supervision and Administration Commission
of the State Council (SASAC), to provide investors on Hexindai's
platform with insurance coverage that protects them against the
potential default risk of non-paying borrowers.
Starting from December 1, 2018, all new loans facilitated on
Hexindai's marketplace have required borrowers to obtain
insurance through Shanxi Zhengxuan. Borrowers pay 4.5% and 0.5% of
the principal amount to Shanxi Zhengxuan as insurance policy
premium and service fee, respectively. If a default were to
occur, Shanxi Zhengxuan will compensate the investor with an amount
up to the loan residual principal and three months of accrued
interest, in accordance with the terms and conditions of the
Cooperation Agreement and the agreements between the borrowers and
Shanxi Zhengxuan.
Shanxi Zhengxuan files its default
information with the Credit Reference Center, the People's Bank of
China (CCRC), which is an
independent credit information service provider under the People's
Bank of China. The Center's
mandate is to establish, operate and maintain a national
centralized commercial and consumer credit reporting system. We
believe that borrowers generally do not want to build a negative
credit record on a national register and therefore its partnership
with Shanxi Zhengxuan could also help to deter fraud and defaults
to some extent.
On January
14, 2019, the China Banking and Insurance Regulatory
Commission (CBIRC) issued a public
report stating that it was imposing certain regulatory measures on
Changan Insurance, the Beijing-based property and liability insurance
company that had previously been providing liability insurance
coverage to investors on Hexindai's platform, because Changan
Insurance did not meet certain solvency and risk measures. Changan
Insurance has been barred from writing new insurance policies,
other than some automobile and liability insurance policies, and
setting up new branches until it increases its capital.
- On June 15, 2018, we
disclosed the launch of our microlending business in our earnings
release for the fourth quarter of fiscal year 2018. As
stated at the time, we began operating an online microlending
business through a newly established entity ("Wusu Company")
majority owned by Hexin Ecommerce Co., Ltd., which is the existing
VIE of Hexindai. Wusu Company was registered in Wusu City, Xinjiang
province on August 28, 2017. Through
a series of contractual agreements, Hexindai obtained control of
the remaining interest of Wusu Company, on January 1, 2018. Wusu Company at the time had
registered capital of RMB200 million
to originate loans.
This has since been increased to
RMB500 million. The default risk is
being carefully controlled, and the maximum outstanding balance of
loans cannot exceed RMB500 million.
"Loans receivable" and "interest receivable" on our balance sheet
show the outstanding balance of our microlending loans and related
interest to be collected, respectively. "Interest income" in our
revenue breakdown shows the revenue from our microlending business
each quarter.
- Our consumer app for borrowers can
be downloaded using the QR code and links on our
website (https://www.hexindai.com/borrow). We encourage
all investors and consumers to download the app and experience our
product first hand. Moreover, users in China can also call our customer service
hotlines. Please note that these are not 24-hour hotlines:
From 9am -
6pm on weekdays: 400 001 1955
From 8:30am - 9pm on weekdays and
from 9am - 6pm on weekends: 400
004 6000
Mr. Xinming Zhou, Chief Executive Officer of Hexindai,
commented, "The last six months have obviously been an extremely
challenging period not just for our company, but for the entire
industry. As we have stated before, regulatory changes are
gradually weeding out firms that are financially weaker, fraudulent
or unable to maintain compliance standards. We believe that the
best run firms will survive and thrive over the long term. Since
our IPO, we have spent a lot of time and efforts improving our
compliance, risk management, product competitiveness, and financial
reporting standards, all to build faith and trust not just among
our investors, but also our day-to-day users in China. This short attack obviously comes at a
sensitive time, but we will fight these baseless allegations as we
look to maintain confidence in our business and help lead the P2P
industry through these challenging times. Our two overriding goals
are, and have always been, to help under-banked consumers in
China get access to credit, and to
increase value for our shareholders over the long term, be it
through growth, share buybacks, and/or dividends."
About Hexindai Inc.
Hexindai Inc. (NASDAQ: HX)
("Hexindai" or the "Company") is a fast-growing consumer lending
marketplace based in Beijing, China facilitating loans to
meet the increasing consumption demand of the emerging middle class
in China. Hexindai provides borrowers with convenient and
ready access to credit through its online marketplace. The Company
offers borrowers a wide range of products designed based on
customer segmentation data and tailored to the specific needs of
the emerging middle class in China by matching them with
investors seeking various types of investment products with
appropriate risk levels and risk-adjusted returns. Hexindai's
strong user acquisition capabilities combined with an online
platform with extensive offline networks, an advanced risk
management system, and strong strategic cooperative relationships
with a custodian bank and an insurance company to safeguard
investments, allows the Company to generate higher customer
satisfaction, reliance, and realize faster growth
in China.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are made under the "safe
harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These statements can be identified by terminology such
as "will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "potential," "continue," "ongoing,"
"targets," "guidance" and similar statements. The Company may also
make written or oral forward-looking statements in its periodic
reports to the U.S. Securities and Exchange Commission (the "SEC"),
in its annual report to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. Any statements that are
not historical facts, including statements about the Company's
beliefs and expectations, are forward-looking statements that
involve factors, risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking
statements. Such factors and risks include, but not limited to the
following: the Company's goals and strategies; its future business
development, financial condition and results of operations; the
expected growth of the credit industry, and marketplace lending in
particular, in China; the demand for and market acceptance of
its marketplace's products and services; its ability to attract and
retain borrowers and investors on its marketplace; its
relationships with its strategic cooperation partners; competition
in its industry; and relevant government policies and regulations
relating to the corporate structure, business and industry. Further
information regarding these and other risks, uncertainties or
factors is included in the Company's filings with the SEC. All
information provided in this announcement is current as of the date
of this announcement, and the Company does not undertake any
obligation to update such information, except as required under
applicable law.
For more information, please
visit http://ir.hexindai.com/
For investor inquiries, please contact:
Hexindai
Investor Relations
Tel: +86-10-5380-6196
Email: ir@hexindai.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In US
Mr. Tip Fleming
Phone: +1-917-412-3333
Email: tfleming@Christensenir.com
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SOURCE Hexindai Inc.