Eric Levine, the founder of stock exchange-listed California Wow Xperience, pleads innocence that he and the directors made fraudulent transfers of the company’s funds overseas

California Wow founder pleads innocence

THE NATION August 22, 2013 1:00 am

ERIC LEVINE, the founder of stock exchange-listed California Wow Xperience, has put up a vigorous defence against the Anti-Money Laundering Office’s allegations that he and the directors made fraudulent transfers of the company’s funds overseas.

In the first statement since the fitness-centre chain hit financial trouble and later faced the AMLO allegations, Levine said the documents provide full disclosure of the company’s financial transactions, and are accompanied by a letter that categorically denies any wrong-doing by the company or any directors. The company also offers total cooperation for the investigation into its bank accounts and business activities, he said.“I state with absolute certainty and in the strongest, most unequivocal terms that California Wow Xperience operated transparently and that neither I nor any director or staff member ever made any improper or illegal transfers of even a single baht out of the company,” he said.
“Even though I have been gravely affected by these public accusations, until now, I chose not to respond. However, I believe a statement of record that lays out my position clearly, and in a straightforward manner, is needed out of respect for all the clubs’ members and the company’s shareholders and directors who may be affected by these allegations.
“I am prepared to give the fullest of cooperation to all agencies and authorities and am confident that the facts will bear out the innocence of myself and anyone else affected by these allegations,” he added.
Levine stressed that as a listed company, California Wow had strictly followed the rules of the Securities and Exchange Commission, the Stock Exchange of Thailand and the Bank of Thailand. Its financial statements were also properly audited, he said.
In regard to the allegations that during 2009-2011, the sums of Bt364 million, B495 million and Bt416 million were illegally transferred out of Thailand, he said any transfers of that scale were almost impossible as the amounts represented nearly half of the company’s entire income in the years in question.
The allegations were announced after the company’s fitness business ran into financial trouble. All centres were closed while a bankruptcy lawsuit was filed by creditors, including Major Cineplex Group, which leased commercial space for the centres.
A number of members, who had made up-front membership fee payments, filed complaints with the consumer-protection agency.
Stressing that he was passionate about the fitness business in Thailand, Levine said the company could have survived if the plans and actions that were being taken for its recovery had not been undermined through illegal actions.
“California Wow Xperience’s business was seriously and adversely affected by the political disturbances and the flooding crisis of 2011. However, it would still have been possible for the company to recover and continue to provide services to members if the landlord of six of our clubs had not interfered in the ability of members to make use of the facilities by obstructing access or disrupting the supply of electricity and other utilities,” he said.
As power and water supply was cut off, key employees left. As the clubs were closed for months, this undermined the rehabilitation plan and members’ confidence, he added.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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