SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE
13d-2(a)
Amendment No. 2
Actions Semiconductor Co., Ltd.
(Name of Issuer)
American Depositary Shares
(Title of Class of
Securities)
00507E107
(CUSIP Number)
ACCRETIVE CAPITAL PARTNERS, LLC
16 Wall Street, 2nd Floor
Madison, CT 06443
RICHARD E. FEARON, JR.
16 Wall Street, 2nd Floor
Madison, CT 06443
(203) 482-5805
(Name, Address and Telephone Number of Person
Authorized to
Receive Notices and Communications)
May 14, 2015
(Date of Event Which Requires Filing of
This Statement)
If the filing person has previously
filed a statement on Schedule 13G to report the acquisition that is the subject
of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e),
13d-1(f) or 13d-1(g), check the following box [ ].
Note. Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See Rule 13d-7 for other parties to whom copies
are to be sent.
(Continued on following pages)
1
|
NAME OF REPORTING PERSONS
Accretive Capital Partners, LLC |
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP*(a) [ ] (b)
[ ] |
3
|
SEC USE ONLY |
4
|
SOURCE OF FUNDS WC |
5
|
CHECK BOX IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) |
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
ILLINOIS |
NUMBER OF SHARES
BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7
|
SOLE VOTING POWER -0- |
8
|
SHARED VOTING POWER 4,340,507
American Depositary Shares |
9
|
SOLE DISPOSITIVE POWER -0-
|
10
|
SHARED DISPOSITIVE POWER
4,340,507 American Depositary Shares |
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 4,340,507 American Depositary
Shares |
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES [ ] |
13
|
PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 7.41% |
14
|
TYPE OF REPORTING PERSON
OO |
1
|
NAME OF REPORTING PERSONS
Accretive Capital Management, LLC |
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP*(a) [ ] (b)
[ ] |
3
|
SEC USE ONLY |
4
|
SOURCE OF FUNDS AF |
5
|
CHECK BOX IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) |
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
ILLINOIS |
NUMBER OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH
|
7
|
SOLE VOTING POWER -0- |
8
|
SHARED VOTING POWER
4,340,507 American Depositary Shares |
9
|
SOLE DISPOSITIVE POWER
-0- |
10
|
SHARED DISPOSITIVE POWER
4,340,507 American Depositary Shares |
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 4,340,507 American
Depositary Shares |
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES [ ] |
13
|
PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 7.41% |
14
|
TYPE OF REPORTING PERSON
OO, HC |
1
|
NAME OF REPORTING PERSONS
Richard E. Fearon, Jr. |
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP*(a) [ ] (b)
[ ] |
3
|
SEC USE ONLY |
4
|
SOURCE OF FUNDS PF |
5
|
CHECK BOX IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) |
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
United States |
NUMBER OF SHARES
BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7
|
SOLE VOTING POWER
5,582,8661 |
8
|
SHARED VOTING POWER -0-
|
9
|
SOLE DISPOSITIVE POWER
5,582,8661 |
10
|
SHARED DISPOSITIVE POWER
-0- |
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 5,582,8661
|
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES [ ] |
13
|
PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 9.53% |
14
|
TYPE OF REPORTING PERSON
IN |
___________________________________
1 Includes
4,340,507 American Depositary Shares held directly by Accretive Capital
Partners, LLC, of which Accretive Capital Management, LLC is the manager and Mr.
Fearon is the managing member of Accretive Capital Management, LLC.
This amendment No. 2 to Schedule
13D (this Amendment No. 2) amends and restates the statement on Schedule 13D
filed on December 3, 2014 as amended prior to the date of this amendment (as so
amended, the Original Schedule 13D), by: (i) Accretive Capital Partners, LLC
an Illinois limited liability company (ACP); (ii) Accretive Capital
Management, LLC, an Illinois limited liability company (ACM); and (iii)
Richard E. Fearon, Jr., a citizen of the United States (together with ACP and
ACM, the Reporting Persons) and relates to the American Depositary Shares (the
Shares) of Actions Semiconductor Co., Ltd., a Cayman Islands corporation (the
Issuer). The address of the principal executive offices of the Issuer is No.
1, Ke Ji Si Road, Technology Innovation Coast of Hi-Tech Zone, Zhuhai,
Guangdong, 519085, The Peoples Republic of China.
The purpose of this Amendment No.
2 is: (i) to amend and restate the percent of class held by the Reporting
Persons, which has changed since the Issuer restated its ordinary share count in
the Issuer's Form 6-K filing for the period ended March 31, 2015, filed with the
Securities and Exchange Commission on May 13, 2015; (ii) to amend the
transactions in the Shares during the past sixty days identified in Schedule A,
attached; and (iii) to correct the typographical error contained in Exhibit
99.1, which stated that Mr. Lin is Director and Chief Financial Officer of a
semiconductor wafer manufacturer, United Microelectronics Corporation, and
should have stated Mr. Lin was Director and Chief Financial Officer of a
semiconductor wafer manufacturer, United Microelectronics Corporation.
Capitalized terms not defined in
this Amendment No. 2 shall have the meaning ascribed to them in the Original
Schedule 13D. Except as set forth herein, the Original Schedule 13D is
unmodified.
Item 1. |
Security and Issuer.
|
Item 1 of the Original Schedule 13D is hereby amended and
restated as follows:
The Reporting Persons
beneficially own 5,582,866 Shares of the Issuer. The number of Shares owned by
the Reporting Persons have been amended and restated to reflect transactions in
the Shares during the past sixty days, which are identified in Schedule A,
attached. Moreover, the Issuer has restated its ordinary share count in the
Issuer's Form 6-K filing for the period ended March 31, 2015, filed with the
Securities and Exchange Commission on May 13, 2015. As a result of this
restatement, the Shares owned by the Reporting Persons now represent a lower
percentage of the outstanding shares of the Issuer than reported in Amendment
No. 1. Specifically, the Shares owned by the Reporting Persons now represent
approximately 9.53% of the ordinary shares outstanding, based on 58,611,190
Shares outstanding as of March 31, 2015, which is the total number of Shares
outstanding, based on 351,667,139 ordinary shares of the Issuer, as reported in
the Issuers 6-K filing for the period ended March 31, 2015, filed with the
Securities and Exchange Commission on May 13, 2015.
Item 5. |
Interest in Securities of the Issuer.
|
Item 5 of the Original Schedule
13D is hereby amended and restated to read in full as follows:
The aggregate percentage of
Shares reported owned by each person named herein is based upon 58,611,190
Shares outstanding as of March 31, 2015, which is the total number of Shares
outstanding, based on 351,667,139 ordinary shares of the Issuer outstanding, as
reported in the Issuers 6-K filing for the period ended March 31, 2015, filed
with the Securities and Exchange Commission on May 13, 2015.
A. |
Each of ACP and ACM: |
|
|
|
|
(a) |
Amount beneficially owned: 4,340,507 |
|
|
Percentage: 7.41% |
|
|
|
|
|
(b) |
1. |
Sole power to vote or direct vote: 0 |
|
|
2. |
Shared power to vote or direct vote: 4,340,507 |
|
|
3. |
Sole power to dispose or direct the disposition:
0 |
|
|
4. |
Shared power to dispose or direct the disposition:
4,340,507 |
|
|
|
|
|
(c) |
The transactions in the Shares by ACP and ACM during the
past sixty days are set forth in Schedule A and are incorporated
herein by reference. |
B. |
Mr. Fearon: |
|
|
|
|
|
(a) |
Amount beneficially owned: 5,582,866 |
|
|
|
|
|
|
Percentage: 9.53% |
|
|
|
|
|
(b) |
1. |
Sole power to vote or direct vote: 5,582,866 |
|
|
2. |
Shared power to vote or direct vote: 0 |
|
|
3. |
Sole power to dispose or direct the disposition:
5,582,866 |
|
|
4. |
Shared power to dispose or direct the disposition:
0 |
|
|
|
|
|
(c) |
The transactions in the Shares by Mr. Fearon during the
past sixty days are set forth in Schedule A and are incorporated
herein by reference. |
|
|
|
|
|
|
An aggregate of 5,582,866 Shares, constituting
approximately 9.53% of the Shares outstanding, are reported in this
Amendment No. 2. |
|
|
|
|
|
(d) |
No person other than the Reporting Persons is known to
have the right to receive, or the power to direct the receipt of dividends
from, or proceeds from the sale of, the Shares. |
|
|
|
|
|
(e) |
Not applicable. |
Item 7. |
Material to be Filed as an Exhibit.
|
Item 7 of the Original Schedule
13D is hereby replaced with the following Exhibit 99.1 to reflect: (i) the
amendment and restatement of the percent of class held by the Reporting Persons,
which has changed since the Issuer restated its ordinary share count in the
Issuer's Form 6-K filing for the period ended March 31, 2015, filed with the
Securities and Exchange Commission on May 13, 2015 and due to transactions by
the Reporting Persons in the Shares during the past sixty days identified in
Schedule A, attached; and (ii) the correction of the typographical error
contained in Exhibit 99.1, which stated that Mr. Lin is Director and Chief
Financial Officer of a semiconductor wafer manufacturer, United Microelectronics
Corporation, and should have stated Mr. Lin was Director and Chief Financial
Officer of a semiconductor wafer manufacturer, United Microelectronics
Corporation:
SIGNATURES
After reasonable inquiry and to
the best of his knowledge and belief, each of the undersigned certifies that the
information set forth in this statement is true, complete and correct.
May 14, 2015
|
ACCRETIVE CAPITAL PARTNERS, LLC
|
|
By: |
Accretive Capital Management, LLC, its managing
member |
|
|
|
|
By: |
/s/
Richard E. Fearon, Jr. |
|
Name: Richard E. Fearon, Jr. |
|
Title: Managing Member |
|
|
|
|
ACCRETIVE CAPITAL MANAGEMENT, LLC
|
|
|
|
|
/s/ Richard E. Fearon, Jr. |
|
Name: Richard E. Fearon, Jr. |
|
Title: Managing Member |
|
|
|
|
|
|
|
/s/ Richard E. Fearon, Jr. |
|
Richard E. Fearon, Jr.
|
SCHEDULE A
Transactions in the Shares During the Past Sixty
Days
Shares of Common Stock |
Price Per |
Date of |
Purchased/(Sold) |
Share($) |
Purchase/(Sale)
|
ACCRETIVE CAPITAL PARTNERS, LLC
|
|
|
|
2,450 |
$1.49 |
3/19/2015 |
1,000 |
$1.50 |
3/20/2015 |
376 |
$1.47 |
3/25/2015 |
400 |
$1.49 |
3/27/2015 |
1,182 |
$1.48 |
3/30/2015 |
2,962 |
$1.48 |
3/31/2015 |
600 |
$1.48 |
4/1/2015 |
2,200 |
$1.54 |
4/9/2015 |
5,300 |
$1.56 |
4/10/2015 |
6,200 |
$1.56 |
4/10/2015 |
1,700 |
$1.55 |
4/13/2015 |
9,000 |
$1.55 |
4/20/2015 |
646 |
$1.50 |
4/28/2015 |
3,900 |
$1.50 |
4/29/2015 |
13,454 |
$1.51 |
4/29/2015 |
6,154 |
$1.50 |
4/30/2015 |
200 |
$1.48 |
5/1/2015 |
5,300 |
$1.48 |
5/4/2015 |
200 |
$1.48 |
5/5/2015 |
800 |
$1.47 |
5/13/2015 |
RICHARD E. FEARON, JR.
None
16 Wall Street, 2nd Floor |
Madison, Connecticut 06443 |
203.482.5805 direct |
info@accretivecapital.com |
www.accretivecapital.com |
An Open Letter to the Board of Directors of Actions
Semiconductor Co., Ltd.
May 14, 2015
Mr. Hsiang-Wei Lee |
Mr. Chin-Hsin Chen |
Mr. Jun Tse Huang |
Mr. Yu-Hsin Lin |
Mr. Nan-Horng Yeh |
Actions Semiconductor Co., Ltd. |
No. 1 Ke Ji Si Road |
Technology Innovation Coast of Hi-Tech Zone |
Zhuhai, Guangdong, 519085 |
Peoples Republic of China |
To the Board of Directors of Actions Semiconductor:
As you know, we received your correspondencewritten by the
Corporate Secretary to Actions Semiconductor, delivered more than four months
after making our director nominations, sent to us by the Companys IR
representative instead of you, and informing us of your extraordinary decision
to reject the Accretive Capital Partners director nominees. We find your
behavior utterly despicable and blatantly conflictedyet perfectly consistent
with your abusive behavior towards shareholders of Actions Semiconductor,
including the largest shareholder of the Company. We cannot fathom how any one
of you can possibly claim to be acting in the best interest of the Company or
its shareholders.
For more than eight long and excruciating years, Accretive
Capital Partners and its affiliates have been among the largest and most
supportive shareholders of Actions Semiconductor Co., Ltd. ("Actions" or the
"Company"). We own over 33.3 million ordinary shares (or approximately 5.6
million ADS shares) held by our fund and its affiliates.
Our ownership now equates to approximately 9.5% of the
outstanding shares (based on 351,667,139 Ordinary Shares outstanding, as
reported in the Issuers 6-K filing for the period ended March 31, 2015, filed
with the Securities and Exchange Commission on May 13, 2015), as compared to
less than 1% held by the entire Board of Directors and management
combined.
Despite your total disinterest in purchasing ownership and your
failure to provide management with any direction to build or even to preserve
value at Actions, we nevertheless take pride in being value-added partners to
the Company and our fellow shareholders. We have worked hard to provide constructive advice during the past eight years,
despite the extraordinary destruction of shareholder value authorized by you, as
directors of our Company.
We believe that investment firms like ours serve an important
societal role in identifying outstanding business managers and supporting them
as they turn their visions of fulfilling market needs into realities of new
products or better services, improving life for everyone. We strive to achieve
our professional responsibilities by investing in and partnering with
exceptional CEOs who have demonstrated their success at allocating assets as
they build superior businesses. And we are committed to allocating the funds
entrusted to us by our investors intelligently, honorably, and just as
rationally.
It is with these responsibilities in mind that we come to the
disheartening conclusion that the Board of Directors at Actions Semiconductor
shares none of our values.
We are writing you once again to advise you of our:
|
1. |
Grave concerns relating to your conflicts of interest
and related-party transactions at Actions Semiconductor and our continued
questions which have gone unanswered by the Board of Directors for over
six months; |
|
2. |
Intention to consider extraordinary corporate
transactions with Actions, including but not limited to a merger,
reorganization, liquidation, or offer to purchase the outstanding
securities of the Company; |
|
3. |
Amendment to our Schedule 13D filing with the U.S.
Securities and Exchange Commission to report these
developments; |
|
4. |
Recommendation that you replace your director
nominations with the candidates nominated by Accretive Capital Partners on
December 8, 2014; and |
|
5. |
Interest in hearing from other concerned shareholders,
who may contact as at the following email or phone number:
info@accretivecapital.com or 203.794.6360. |
We are extremely troubled by the obvious conflicts of interest
and related-party transactions with Nan-Horng Yeh ("Mr. Yeh") and Yu-Hsin Lin
("Mr. Lin"), and we are shocked that other Board members do not understand the
risks of providing continued support to these two directors.
Specifically: Mr. Yeh is Chairman of the Board and substantial
owner of Realtek Semiconductor Corporation (Realtek), which has received
significant investment capital from Actions; moreover, Mr. Yeh's elder brother
is President of GMI Technology ("GMI"), which is one of the largest distributors
of semiconductors for Actions and was sold product for $9.2 million in 2014; and
Mr. Lin was Director and Chief Financial Officer of a semiconductor wafer
manufacturer, United Microelectronics Corporation ("UMC"), which sells Actions
almost all of its semiconductor wafers.
Each of these related-parties stands to lose substantial
profits if Actions were to sell the Company to a third party or even to
eliminate certain unprofitable product lines so that Actions shareholders could
benefit from a profitable business of their own. Meanwhile, Mr. Yeh continues to serve as a director at Actions, charged by our
Company with fiduciary duties to Actionsand not to Realtek or GMI. Amazingly,
Mr. Lin serves as Chairman of the Audit Committee for Actions, entrusted with
the responsibility and power to approve these related party transactions.
In each of the last six (6) years since 2008, Actions has
hemorrhaged an operating loss totaling a staggering $102.7 million. Last year
alone, under the direction of this Board, Actions destroyed $39.5 million of
Company assets with its operating loss.
|
1. |
Did Realtek, GMI, or UMC suffer any of these operating
losses? |
|
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|
2. |
What products were sold to GMI for $9.2 million in
2014 and were they sold at a loss or had they been previously written
down? |
|
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|
3. |
How is it that these related parties to Mr. Yeh and
Mr. Lin can enjoy profits from Actions when we shareholders must endure
these extraordinary losses? |
|
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|
4. |
How is it that Mr. Yeh and Mr. Lin are acting in the
best interest of Actions shareholders by authorizing ongoing operating
losses to the benefit of Realtek, GMI, and UMC? |
|
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|
|
5. |
How does Mr. Yeh fulfill his fiduciary duties as a
director when he is personally conflicted in significant related party
transactions with Realtek and GMI? |
|
|
|
|
6. |
How does Mr. Lin fulfill his fiduciary duties as
Chairman of the Audit Committee when he is personally conflicted in
significant related party transactions with
UMC? |
Mr. Yeh and Mr. Lin are unwilling to authorize additional
Company stock repurchases, have purchased no Actions stock for themselves, and
are unwilling to consider a sale of the Company. We believe the sole purpose for
continuing this money-losing business at the expense of Actions shareholders is
to enrich the related parties of Mr. Yeh and Mr. Lin.
We are also perplexed by the transactions approved by this
Board on behalf of shareholders. The following investments, as reported in the
Company's Form 20-F filings since 2005, have resulted in an astounding loss
of more than $35.9 million, or 46% of the invested capital:
($ in
millions) |
Date of Investment |
Amount Invested |
Carrying
Value at 12/31/14
|
Return on Investment |
Beijing Actions Microelectronics Co., Ltd. |
2005 |
$ 6.1 |
$ 3.3 |
-45% |
AMC Holdings Limited |
2007 |
27.0 |
0.0 |
-100% |
Bizlink Holdings Inc. |
2007 |
1.0 |
0.0 |
-100% |
Unitech Electronics Co., Ltd. |
2007 |
0.2 |
0.0 |
-100% |
Actar Limited |
2008 |
3.0 |
0.0 |
-100% |
Nann Capital Corporation |
2009 |
24.2 |
24.0 |
-1% |
Grand Choice Investment Limited |
2010 |
2.7 |
0.8 |
-70% |
Hi-Trend Investment Holdings Co.,
Ltd. |
2010 |
1.0 |
1.1 |
8% |
OCTT Asia Limited |
2011 |
13.7 |
13.7 |
0% |
Total |
|
$ 78.9 |
$ 43.0 |
-46%
|
Beijing Actions Microelectronics Co., Ltd.
On November 17, 2005 Actions established a subsidiary, Actions
Microelectronics Co., Ltd. ("Beijing Actions") which served as a holding company
for its research and development center for imaging and video technology. On
September 22, 2009, Beijing Actions introduced a group of new shareholders and
Actions further invested $1.5 million. The Company subsequently invested an
additional $2.6 million on January 25, 2011. Actions total investment reached
$6.1 million as of January 25, 2011, and the Company held a minority
stake of 46% equity interest in Beijing Actions. The carrying value as of
December 31, 2014 was only $3.3 million, a 45% decline in value.
|
7. |
Who owns the other 54% of Beijing
Actions? |
|
|
|
|
8. |
Why is this minority investment in a business
controlled by another party that has lost 45% of its value in the best
interest of Actions shareholders? |
AMC Holdings Limited
In 2007, Actions acquired a minority stake of 5% equity
interest in AMC Holdings Limited ("AMC"), which has somehow grown to a total
investment of $27.0 million. AMC was established in Taiwan and engages in
manufacturing printed circuit board (PCB) laminate and providing other related
sub-contractor service. Actions' investment in AMC is now worthless, with a
reported carrying value of $0.0 as of December 31, 2014.
|
9. |
Who owns the other 95% of AMC? |
|
|
|
|
10. |
Why is a minority investment in a Taiwanese company
unrelated to Actions core business that lost an astounding $27.0 million
in the best interest of shareholders? |
Bizlink Holdings Inc.
In 2007, Actions made a $1.0 million investment in Bizlink
Holdings Inc. ("Bizlink"), a manufacturer of interconnectivity solutions such as
cable, wire and connectors. In 2008, the equity value of this investment was
wiped out, resulting in a $0.0 carrying value as of December 31, 2008.
|
11. |
Who were the other investors in Bizlink? |
|
|
|
|
12. |
Why is this investment, which lost its entire value in
1 year, in the best interest of shareholders? |
Unitech Electronics Co., Ltd.
In 2007, Actions invested $100,000 in Unitech Electronics Co.,
Ltd. ("Unitech"), a manufacturer and designer of automatic identification and
data collection products. Actions invested an additional $100,000 in 2008; since
increasing its investment in Unitech to $200,000 in 2008, however, Actions has
made no mention of this investment in its subsequent 20-F filings.
|
13. |
What has happened to Actions investment in Unitech
and what is its current value? |
|
|
|
|
14. |
Why is this investment in the best interest of
shareholders? |
Actar Limited
In 2008, Actions acquired a 7% minority stake in Actar
Limited ("Actar"), which was established in the PRC and engages in the
entertainment media industry, for $3.0 million. Since Actions made this
investment, Actar has become fully impaired, completed a liquidation process,
and has a carrying value of $0.0 as of December 31, 2014.
|
15. |
Who owns the other 93% of Actar? |
|
|
|
|
16. |
Why is this $3 million minority investment, which
resulted in a total loss of capital, in the best interest of
shareholders? |
Nann Capital Corporation
In August 2009, the Companys Hong Kong subsidiary, Actions
Enterprises (via its Shanghai subsidiary, Actions Technology), obtained land use
rights to the Shanghai Zhangjiang High-Tech Park office building. Less than a
year later, in July 2010, the Company transferred all ownership interest of
Actions Enterprises to Nann Capital ("Nann") for $1 and the Company further
invested $4.4 million for a 40% ownership stake in Nann. The following year, in
June 2011, Actions invested an additional $7.1 million in Nann. In April 2014,
Actions invested another $3.7 million, and in May 2014, Actions invested an additional
$9.0 million, for a total investment of $24.2 million.
|
17. |
Who owns and manages Nann? |
|
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|
18. |
Where is Nann domiciled? |
|
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|
19. |
What are the management fees paid by Actions to
Nann? |
|
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|
|
20. |
What are Actions liquidity provisions for this
investment? |
|
|
|
|
21. |
Why is this minority investment in Nann in the best
interests of Actions shareholders? |
Hi-Trend Investment Holdings Co., Ltd.
In 2010, Actions acquired a 10% minority equity interest
in Hi-Trend Investment Holdings Co., Ltd ("Hi-Trend") for $800,000. Hi-Trend was
established in the PRC and engages in developing and manufacturing of integrated
circuits and chips. Actions made an additional $202,000 investment and its
ownership was subsequently diluted to 9%. The carrying value of Hi-Trend was
$1.1 million as of December 31, 2014.
|
22. |
Who owns the other 91% of Hi-Trend? |
|
|
|
|
23. |
Why is this minority investment in the best interest
of shareholders? |
Grand Choice Investment Limited
In February 2010, Actions purchased a 20% minority
interest in Grand Choice Investment Limited ("Grand Choice") for $600,000. Grand
Choice is a private company established in February 2010 which designs and
manufactures software and hardware for electronic books. In December 2010,
Actions invested another $600,000 to maintain its 20% interest, and in March and
April 2011, Actions' ownership was diluted to 15% and 12%, respectively, due to
additional capital injection from other investors. In September 2012, Actions
invested yet another $1.5 million in Grand Choice, increasing its total
investment to $2.7 million and ownership to 19%. The carrying value of Grand
Choice is only $819,000 as of December 31, 2014, a 70% loss on investment.
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24. |
Who owns the other 81% of Grand Choice? |
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25. |
Why is this minority investment that has resulted in a
70% loss in the best interest of shareholders? |
OCTT Asia Limited
In January 2011, Actions invested $13.7 million in OCTT Asia
Limited ("OCTT"), a private equity fund incorporated in Mauritius for the stated
purpose of investing in fabless semiconductor design companies in Taiwan that
would provide M&A opportunities for the Company. Of the $70 million managed
by OCTT, $30.6 million was invested in Realtek Semiconductor Corporation, whose
Chairman and substantial owner is Actions Board member Mr. Yeh. Moreover, in
your June 11, 2014 letter to shareholders you stated, "Our investment in the
private equity fund OCTT Holding Co., Ltd. has been financially rewarding"; yet
the December 31, 2014 carrying value of the OCTT is unchanged from Actions
original 2011 investment.
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26. |
Who owns and manages OCTT? |
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|
27. |
How is OCTT's investment in Realtek consistent with
Actions' stated purpose of investing in OCTT? |
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28. |
With no investment appreciation, how is the investment
in OCTT financially rewarding for shareholders? |
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|
29. |
Why is this minority investment in OCTT in the best
interests of Actions shareholders? |
Shanghai Real Estate Project
In November 2014, Actions announced that it invested $10
million for a 40% minority stake in Shanghai real estate, which the CEO
of Actions stated was not the core business of Actions Semiconductor. Yet,
just one month later, in a Form 6-K filed with the U.S. Securities and Exchange
Commission on December 9, 2014, Mr. Lee described cash as so "scarce" that the
Company would not be using it "to buy back shares and, by so doing, limiting our
operating flexibility and ability to act quickly, risk[ing] putting the Company
at a competitive disadvantage and serv[ing] shareholders poorly."
|
30. |
How is a $10 million minority real estate investment
more attractive than repurchasing $10 million of additional Company stock
at $2.50/share and below, when the Company's liquidation value is over
$3.30/share? |
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31. |
Who owns and controls the other 60% of this Shanghai
real estate project? |
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32. |
Why is this minority investment in real estate in the
best interests of Actions shareholders? |
We believe these decisions conflict directly with the Companys
Corporate Governance Guidelines transcribed below:
Transactions with Directors and their Affiliates:
Except for employment arrangements with the CEO and other
management directors, the Company does not engage in
transactions with directors or their affiliates if a transaction
would cast into doubt the independence of a director, would present
the appearance of a conflict of interest, or is otherwise
prohibited by law, rule or regulation. This includes, directly or
indirectly, any extension, maintenance or renewal of an extension of credit to
any director or member of management of the Company. This prohibition also
includes significant business dealings with directors or their affiliates,
substantial charitable contributions to organizations in which a director is
affiliated, and consulting contracts with, or other indirect forms of
compensation to, a director. The Board will conduct an appropriate review of all
related party transactions on an ongoing basis. Page 3, Paragraph 3, Actions
Semiconductor Corporate Governance Guidelines
We are profoundly concerned about the conflicts of interest
among the Board of Directors at Actions and by the accelerating pace of
extraordinary destruction in shareholder value of our Company and we demand
answers to the questions contained in this letter. We remain resolute in
correcting this situation and adamant that you follow through with your
commitment to support the nomination of our two directors. The disproportionate
research and development expenditure must be reduced immediately and the company
should be sold to better custodians of capital.
For over eight long and painful years, Accretive remained a
patient and supportive long-term investor in Actions, hoping that its Board of
Directors would act in the best interests of shareholders. You have failed us
and all of our fellow shareholders, and we are determined to stop the Board from
destroying additional value of our assets at Actions Semiconductor.
ACCRETIVE CAPITAL MANAGEMENT, LLC
Regards,
Richard E. Fearon, Jr.
Managing Partner
About Accretive Capital Partners:
Accretive Capital Partners is an investment fund focused on value
investing in small and micro-cap public companies in which its active
partnership with management may help to build and unlock shareholder value.
With inquiries please contact: |
Accretive Capital Management, LLC |
16 Wall Street, 2nd Floor |
Madison, CT 06443 |
email: |
info@accretivecapital.com |
website: |
www.accretivecapital.com |
phone: |
203.794.6360 |
Actions Semiconductor Co., Ltd. ADS, Each Representing Six Ordinary Shares (NASDAQ:ACTS)
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Actions Semiconductor Co., Ltd. ADS, Each Representing Six Ordinary Shares (NASDAQ:ACTS)
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From Jun 2023 to Jun 2024