Date: January 16, 2001
OPAL TECHNOLOGIES, INC.
Suite 2810, West Tower, Shun Tak Centre
200 Connaught Road
Central, Hong Kong
Grant Thornton
13th Floor, Gloucester Tower
The Landmark
11 Pedder Street
Central, Hong Kong
Attn: Mr. Antonio Chan, Partner
Dear Sir:
Re: Audit of Opal Technologies, Inc.
Recently, United Power Investment Limited loaned the sum of US$10,000,000 to
Opal Technologies, Inc. In conjunction with its due diligence, the firm of
Moores Rowland was retained. As a result of this due diligence, it has come to
our attention that certain assets listed in prior financial statements of the
Company on which you expressed an opinion, may not in fact exist. These assets
are classified under "construction in progress" on the balance sheet of the
corporation. There is also an item on the balance sheet for the "investment in
China Can". After research of this matter, it appears that this asset is either
significantly overstated or is not in fact a valid asset.
In addition to the foregoing, the Company has noted significant unauthorized
expenditures in the operation accounts of the Company. There has never been
established any independent bank account for Opal Technologies, Inc., but rather
all of the obligations of Opal were paid directly by Bestalong Group, Inc., the
controlling shareholder of the company. Included in such expenditures were
numerous expenses by management which seem to bear no relationship to the
operations of Opal Technologies, Inc. These expenditures have a significant
effect on the reported income and/or loss of Opal Technologies, Inc.
In April this year, Mr. Edmond Au and I made a courtesy call to you office after
our appointment as directors of the Company. I recalled that during the meeting,
we did raise some of these issues. These findings have now been brought to the
attention of the U.S. Securities & Exchange Commission ("SEC") through our U.S.
counsel. The SEC has requested that the auditors respond to these matters on or
before August 26, 2000. Therefore, your response would be greatly appreciated,
as it may be necessary for the Company to file amended `34 Act reports because
of a restatement of the financial statements.
Should you prefer to set up a meeting to discuss the matter in greater details,
please contact the undersigned.
Yours sincerely,
OPAL TECHNOLOGIES, INC.
Eric Cheng
Chief Executive Officer