EDMONTON, May 15, 2013 /CNW/ - The Cash Store Financial Services Inc.
("Cash Store Financial" or the "Company") (TSX:CSF) (NYSE: CSFS) is
announcing today that its Special Committee of independent directors
has concluded its previously announced Special Investigation. As
previously disclosed on December 28, 2012, the Special Committee was
formed to investigate certain matters related to the acquisition of a
consumer loan portfolio from third-party lenders in late January 2012
(the "Transaction"), including allegations raised regarding
inappropriate benefits that were alleged to have accrued to certain
parties related to the Company and the related accounting treatment.
Under its mandate, the Special Committee was required to investigate
and review the facts and circumstances relevant to the allegations and
to report its findings to the Audit Committee and the Board of
Directors. To carry out its mandate, the Special Committee engaged
outside legal counsel who retained independent forensic investigators
to conduct factual inquiries necessary for the Special Committee to
fulfill its mandate.
The investigation followed a review conducted by the Company's internal
auditor under the direction of the Audit Committee of the Board, and
the restatement by the Company in December 2012 of its unaudited
interim quarterly financial statements and MD&A for periods ended March
31, 2012 and June 30, 2012.
The investigation covered the period from December 1, 2010 to January
15, 2013 and was carried out over four months. It involved interviews
of current and former officers, directors, employees and advisors of
the Company and a review of relevant documents and agreements, as well
as electronically stored information obtained from Company computers
and those of employees, former employees and directors most likely to
have information relevant to the investigation.
The Special Committee has reported its findings on the allegations to
the Board of Directors and, consistent with the recommendation made to
the Board of Directors by the Special Committee, the Board has
determined that no further corrections or restatements of previously
reported financial statements and other public disclosures are required
in relation to the Transaction.
On May 13, 2013, the Company announced that it will file amended
financial statements to correct its accrual for the British Columbia
class action settlement costs. This restatement is not related to the
matters that were under investigation by the Special Committee.
About Cash Store Financial
Cash Store Financial is the only lender and broker of short‐term
advances and provider of other financial services in Canada that is
listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial
also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store
Financial operates 513 branches across Canada under the banners "Cash
Store Financial" and "Instaloans". Cash Store Financial also operates
25 branches in the United Kingdom.
Cash Store Financial and Instaloans primarily act as lenders and brokers
to facilitate short-term advances and provide other financial services
to income-earning consumers who may not be able to obtain them from
traditional banks. Cash Store Financial also provides a private-label
debit card (the "Freedom" card) and a prepaid credit card (the "Freedom
MasterCard") as well as other financial services, including bank
Cash Store Financial employs approximately 1,900 associates and is
headquartered in Edmonton, Alberta.
Cash Store Financial is a Canadian corporation that is not affiliated
with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd.
operates in the United States under the name "Cash Store". Cash Store
Financial does not do business under the name "Cash Store" in the
United States and does not own or provide any consumer lending services
in the United States.
This news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning of United States
federal securities legislation, which we refer to herein, collectively,
as "forward-looking information". Forward-looking information includes,
but is not limited to, information with respect to our objectives,
strategies, operations and financial results, competition, as well as
initiatives to grow revenue or reduce retention payments. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "estimates", "plans", "expects", or
"does not expect", "is expected", "budget", "scheduled", "forecasts",
"intends", "anticipates", or "does not anticipate", or "believes" or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might", or "will be taken",
"occur", or "be achieved". In particular, this news release contains
forward-looking information with respect to our goals and strategic
priorities, introduction of products, share repurchase initiatives,
branch openings and competition, as well as initiatives to grow revenue
or reduce retention payments. Forward-looking information is subject
to known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of Cash Store Financial, to be materially different from
those expressed or implied by such forward-looking information,
including, but not limited to, changes in economic and political
conditions, legislative or regulatory developments, technological
developments, third-party arrangements, competition, litigation, risks
associated with but not limited to, market conditions, and other
factors described under the heading "Risk Factors" in our Annual MD&A,
which is on file with Canadian provincial securities regulatory
authorities, and in our Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission. All material assumptions used in
providing forward-looking information are based on management's
knowledge of current business conditions and expectations of future
business conditions and trends, including our knowledge of the current
credit, interest rate and liquidity conditions affecting us and the
general economic conditions in Canada, the United Kingdom and
elsewhere. Although we believe the assumptions used to make such
statements are reasonable at this time and have attempted to identify
in our continuous disclosure documents important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. Certain
material factors or assumptions are applied by us in making
forward-looking information, including without limitation, factors and
assumptions regarding our continued ability to fund our payday loan
business, rates of customer defaults, relationships with, and payments
to, third party lenders, demand for our products, as well as our
operating cost structure and current consumer protection regulations.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should
not place undue reliance on forward-looking information. We do not
undertake to update any forward-looking information, except in
accordance with applicable securities laws.
SOURCE: The Cash Store Financial Services Inc.
For further information:
Gordon Reykdal, Chairman and CEO, at 780-408-5118; or,
Peter Block, Partner, National Public Relations, at 416-848-1431 (direct) or 416-904-2120 (mobile)