Board reshuffle continues at troubled dye maker China Fibretech

MAINBOARD-LISTED China Fibretech has made further changes to its board and board committees following the stepping down of its chairman and the resignation of one of its directors.

Executive chairman Wu Xinhua has stepped down and will relinquish his role as chief executive officer with immediate effect, the company said in a Singapore Exchange (SGX) filing on Monday. However, Mr Wu will continue to serve on the board as a director and be re-designated as a non-executive, non-independent director of China Fibretech, a fabric treatment company.

Additionally, non-executive and non-independent director Wu Dezhi has resigned with immediate effect, and has ceased to be a member of the audit, remuneration and nominating committee.

Conversely, Toh Tiong San has been appointed as a non-executive, independent director of the company, as well as chairman of the remuneration committee, and a member of the audit and nominating commitee effective immediately, the company said. Mr Toh comes from a capital market background and held a number of senior appointments in government-linked companies and financial institutions in Singapore, including DBS Bank and Temasek Holdings.

This shuffling of the board members come on the back of uncertainties in the troubled company over the past few years.

On Sept 29, 2016, China Fibretech said that Wu Xinhua and Wu Dezhi had authorised payment to three customers who allegedly told the firm that they had suffered damages and financial losses totalling about 470 million yuan (S$96.53 million).

These payments were made without the knowledge of then-independent director Low Wai Cheong, and ex-senior finance manager Mak Chi Shing. They were also made despite requests by Mr Low and Mr Mak for the company to engage a law firm to handle the claim, and to seek board approval before making any payments.

According to SGX filings, Mr Low still sits on the board of directors as of Monday as a non-executive lead independent director, while Mr Mak had previously stepped down when the firm stopped paying his salary from May 2017 without advance notice or any reason.

In March this year, SGX filed complaints with the authorities both here and in China against Wu Xinhua for alleged offences under the Chinese Penal Code. This marked the first time the Singapore bourse has sought the cooperation of the Chinese authorities to deal with a Singapore-listed Chinese company, or a S-chip.

Most recently on Oct 15, China Fibretech responded to an earlier SGX query, saying that no meeting of the company's nominating commitee was convened to consider the appointment of its two new directors, namely Choo Han Kiat, Eric and Leow Yong Kin, to its board.

Instead, both Mr Choo and Mr Leow were appointed by way of board resolution in writing signed by Wu Xinhua and Wu Dezhi, which constituted the majority of the board when the resolution was passed.

Trading of China Fibretech's shares have been suspended since November 2015.