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China Fibretech warns of 'significant' Q3 loss due to disputed payments
CHINA Fibretech warned that it will report a significant loss for the third quarter and nine months ended Sept 30 as a result of disputed payments made to settle a claim.
The fabric treatment company had suspended its stock a year ago over claims by customers on alleged quality issues. On Sept 29, 2016, China Fibretech announced that executive chairman and chief executive Wu Xinhua and non-executive director Wu Dezhi had authorised payment to the claimants through a subsidiary without the knowledge of independent director Low Wai Cheong or senior finance manager Mak Chi Shing.
Those payments were 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.
Attempts to appoint a statutory auditor and a second independent director have also been delayed as a result of Mr Wu Xinhua's requests to postpone those decisions.
Trading in the shares remains suspended.