CHINA CABLE AND COMMUNICATION INC.
22 Bei Xin Cun Hou Street
Xiang Shan, Haidian District
Beijing 100093, the People's Republic of China
Tel: (86) 10-8259-9426
Fax: (86) 10-8259-9425
December 14, 2005
VIA EDGAR AND FEDERAL EXPRESS
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington DC, 20549
Attn: Bob Carroll
Carlos Pacho
Re: China Cable and Communication, Inc.
Form 10-KSB for Fiscal Year Ended December 31, 2004
Filed May 16, 2005
File No. 002-98997-NY
Messrs. Carroll and Pacho:
On behalf of China Cable and Communication, Inc. (the "Company"), we
enclose a marked draft of the Company's proposed Amendment No. 1 to Form 10-QSB
for the quarterly period ended March 31, 2005 (the "Amended Quarterly Report").
The Amended Quarterly Report contains revisions that have been made in response
to the comments received from the staff ("Staff") of the Securities and Exchange
Commission in their letter dated October 11, 2005. Set forth below are the
Company's responses to the Staff's comments. We have reproduced the Staff's
comments and have followed each comment with our response. A marked copy of the
Amended Quarterly Report is being provided supplementally with a copy of this
letter for the convenience of the Staff.
Form 10-KSB for Fiscal Year Ended December 31, 2004
Basis of Consolidation, page F-9
1. We note your response to our prior comment # 2. We also note under Item
7.3 of your Joint Venture Agreement that a number of resolutions must be
passed unanimously by the board of directors. Please refer to Item 7.3 and
tell us why you believe that resolution numbers 3,4,5 and 7 should be
considered protective rights under EITF 96-16.
RESPONSE:
Under the Joint Venture Agreement, resolution numbers 3, 4, 5, and 7 are
related to the protection of the minority shareholder's right on
distribution of registered capital; the sale and/or transfer of the
interest of the majority shareholder to others, not the minority
shareholder's interest; the use of the majority interests as collateral
which will ultimately affect the minority interests; and the use of the
Company's assets as collateral without informing the minority shareholder,
respectively. All of these rights are only protective in nature and not
participating in nature. These rights are normally provided to the
minority shareholder.
2. We note that as a result of the amendment of the Joint Venture Agreement
in 2003 you now can appoint 5 out of the 9 members of the board of
directors. However, we also note in Chapter 8 of the Joint Venture
Agreement that the Joint Venture should establish a joint managerial
institution to be responsible for its daily operation and management. We
also note that a General Manager proposed by Party A shall be in charge of
the joint managerial institution. Since Party A is in charge of the Joint
Venture's daily operations, it is unclear to us how you concluded that you
should control the Joint Venture. Please revise or advise in detail.
RESPONSE:
The Joint Venture Agreement states that the highest authority of the Joint
Venture is the Board of Directors in which the Company controls the
majority. For the daily operations, the Board of Directors formulates the
policies and delegates the execution rights to the joint managerial
institution. Although Party A proposes and appoints the General Manager
who is the head of the joint managerial institution, the joint managerial
institution only has the power to execute the policies set by the Board of
Directors on managing the daily operations of the Joint Venture.
Accordingly, we consider that only the Board of Directors is allowed to
make decisions in the ordinary course of business. The joint managerial
institution can only carry out the decisions made by the Board of
Directors. Thus, we control the Joint Venture because we control the Board
of Directors of the Joint Venture.
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
Consolidated Statement of Operations and Comprehensive Income, page 4
3. It is unclear to us why you did not classify your provision for bad debts
below your loss from operations. Please revise or advise.
RESPONSE:
We will revise our Form-10QSB for Fiscal Quarter Ended March 31, 2005 by
reclassifying the provision for bad debts below the loss from operations.
We hope that the information contained in this letter satisfactorily addresses
the comments by the Staff. Please do not hesitate to contact the undersigned by
telephone at (86) 10-8259-9426 , or by facsimile at (86) 10-8259-9425.
Very truly yours,
CHINA CABLE AND COMMUNICATION, INC.
By: /s/ Da-xiang Zhang
--------------------------
Da-xiang Zhang
Director
Enclosures
Exhibit A
COMPANY ACKNOWLEDGMENT
In connection with responding to the Commission's comment letter dated October
11, 2005, China Cable and Communication, Inc. (the "Company") acknowledges that:
1. the Company is responsible for the adequacy and accuracy of the
disclosure in the filings;
2. staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
3. the Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
CHINA CABLE AND COMMUNICATION, INC.
By: /s/ Da-xiang Zhang
------------------------------
Da-xiang Zhang
Director
China Cable and Communication, Inc.