China Essence Group, which makes and sells potato-based food products in China and Taiwan, has revealed that the shareholding of at least two of its subsidiaries had been changed to certain individuals in April 2015.
Moore Stephens had performed a preliminary company search on the group’s subsidiaries in China and notified the board of the change on Sept 4.
The new directors who were appointed last month have no prior knowledge of the transactions. However, non-executive independent chairman Er Kwong Wah, a member of the former board, has confirmed that the transactions were neither authorised by that board nor submitted to it for approval.
The transactions were also not reported in the 1QFY2015 financial results announcement as the former executive chairman and CEO, Zhao Libin, who had admitted that he carried out the transactions, did not disclose the matter to the board.
The board has communicated with Zhao through the company’s CFO, Yap Kong Wai. Zhao informed Yap that the unauthorised transactions were the result of long-standing debts to the farmers by the subsidiaries and the farmers had almost run riot at the factory. The local government had to step in to stop the riot by settling the debts on behalf of the subsidiaries. In return, the two subsidiaries had to transfer the shares to the local government as held in trust.
The board will take proper action on this matter after seeking advice from the authorities and legal adviser, the company says. It will update shareholders in due course.
The counter last traded at one cent.
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Moore Stephens had performed a preliminary company search on the group’s subsidiaries in China and notified the board of the change on Sept 4.
The new directors who were appointed last month have no prior knowledge of the transactions. However, non-executive independent chairman Er Kwong Wah, a member of the former board, has confirmed that the transactions were neither authorised by that board nor submitted to it for approval.
The transactions were also not reported in the 1QFY2015 financial results announcement as the former executive chairman and CEO, Zhao Libin, who had admitted that he carried out the transactions, did not disclose the matter to the board.
The board has communicated with Zhao through the company’s CFO, Yap Kong Wai. Zhao informed Yap that the unauthorised transactions were the result of long-standing debts to the farmers by the subsidiaries and the farmers had almost run riot at the factory. The local government had to step in to stop the riot by settling the debts on behalf of the subsidiaries. In return, the two subsidiaries had to transfer the shares to the local government as held in trust.
The board will take proper action on this matter after seeking advice from the authorities and legal adviser, the company says. It will update shareholders in due course.
The counter last traded at one cent.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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