Market Overview

China Mobile Games, Entertainment Issues Details of Organizational Restructuring, Employee Changes

China Mobile Games and
Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq: CMGE), the
largest publisher and a leading developer of mobile games in China, today
announces the implementation of organizational restructuring and personnel
changes in its game publishing business. The purpose of the restructuring is
to streamline the Company's operations to better position it for profitable
long-term growth.

The Company has made the transition from a feature phone game developer to a
mobile game publisher and developing platform, leading to rapid growth.  Since
Mr. Shuling Ying was asked to oversee the Company's publishing business in
October 2013, its publishing business has grown significantly, and now has
teams of over 700 employees located in Beijing, Shanghai, Shenzhen and
Chengdu.  However, the Company's rapid growth has also created operational
challenges that it must carefully manage, including redundancies within its
businesses which have resulted in inefficiencies. To make the Company more
efficient and competitive and to continue producing high quality and
innovative products, and to ensure the Company is positioned to be profitable
and achieve sustainable growth, the chief executive officer has been tasked
with conducting organizational reviews and structural realignments.  As part
of the organizational restructuring of its publishing business, on June 19,
2014 the Company removed nine employees from their positions in the publishing
business, including Mr. Ying.  The Company notes that these employees are
awaiting reassignments within the Company.  The Company does not expect this
restructuring, including the personnel changes, to have a material adverse
impact on the Company's overall operations.  The Company expects the
restructuring will enhance its productivity, helping to strengthen its leading
market position.

The Company is aware of market speculations about the reasons for the
restructuring, including allegations of employee misconduct, which have led to
significant fluctuations in its ADS price.  The Company announces that today
its board of directors has authorized an independent committee, consisting
solely of independent directors, to look into the market speculations.  In
order to provide a high level of transparency to its shareholders, the Company
will update shareholders on the results of its findings.

Posted-In: News Press Releases

 

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