GreenStar Announces Temporary Cease Trade Order

TORONTO, ONTARIO--(Marketwired - June 4, 2014) - GreenStar Agricultural Corporation (TSX VENTURE:GRE) ("GreenStar" or the "Company") announces that a temporary cease trade order has been issued by the Ontario Securities Commission ("OSC") on June 3, 2014. The OSC has issued the order due to the Company's delay in filing its audited financial statements for the year ended December 31, 2013 and unaudited interim financial statements of the Company for the three month period ended March 31, 2014, accompanying management's discussion and analysis, and related CEO and CFO certifications, as required by Ontario securities law (the "Required Filings").

The Company previously applied for, and was granted a management cease trade order on May 16, 2014 (the "MCTO") which MCTO imposes restrictions on all trading in and all acquisitions of securities of the Company, whether direct or indirect, by the Chief Executive Officer and the Chief Financial Officer of the Company until the Company files the Required Filings.

Notwithstanding the MCTO, the Company believes that the OSC decided to issue the temporary cease trade order due to the concern that the audit wouldn't be completed by June 30, 2014. The temporary order directs that all trading in the securities of the Company, whether direct or indirect, cease for a period of fifteen days from June 3, 2014. The OSC also gave notice that if the default continues, a hearing will be held to consider whether an order should be made that all trading in the securities of the Company cease permanently or for such period as is specified in such order by reason of the continued default.

The delay in filing was the result of GreenStar having received notice from its auditors that they were not able to provide an audit opinion by the filing deadline for the Annual Filings. On May 21, 2014, GreenStar announced that its audit committee has identified certain corporate governance and administrative deficiencies which contributed to the delay in the audit. The audit committee has since been working with Mr. Guan Lianyun, President and CEO of the Company, to ascertain further details of these deficiencies. Mr. Guan has advised that the Company's Pucheng, PRC finance department, led by the Company's local controller, have not been co-operative with the Company's auditors or the Company's audit committee's efforts to complete the 2013 year end audit on schedule. In particular, the local controller has taken control of the Company's finance chop (seal) which has resulted in the inability of the Company to obtain assistance and certain required information from the Company's banks and tax authorities during the auditing process. Mr. Guan is in control of the Company's legal representative chop. Both the legal representative chop and the finance chop are required to execute banking transactions; as such, the finance chop alone does not allow the local controller to undertake banking transactions and Mr. Guan has advised that the bank accounts are secure. Mr. Guan has advised the board that the local controller and other PRC finance department staff are taking such actions with a view to advance their positions in negotiations regarding elements of their remuneration.