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China Sky Chemical Fibre says winding-up proceedings of subsidiary not verified

Tuesday, August 30, 2016 - 18:11

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CHINA Sky Chemical Fibre Co Ltd on Tuesday said it has received information that winding-up proceedings have started in China against its wholly-owned subsidiary, Quanzhou Tianyu Chemical Fiber & Weaving Industry Co Ltd.

CHINA Sky Chemical Fibre Co Ltd on Tuesday said it has received information that winding-up proceedings have started in China against its wholly-owned subsidiary, Quanzhou Tianyu Chemical Fiber & Weaving Industry Co Ltd.

In a filing to Singapore Exchange (SGX), it said the information has not been verified because court searches have not been conducted with the relevant Chinese authorities.

"The company is currently not able to obtain further information of the winding-up proceedings as the legal representative of Tianyu is unwilling to cooperate in obtaining and providing further details, or to confirm the winding-up proceedings."

The mainboard-listed nylon and textile producer said it is in the process of engaging suitable Chinese counsel to obtain further details on the proceedings and will keep shareholders informed of any further developments.

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On Aug 16, the company said three of its subsidiaries, including Tianyu, had either suspended production or reduced their production lines, amid continued weak demand for its products and softening selling price.

A day earlier (Aug 15), it disclosed that Tianyu was being sued by former employees who were laid off. It had received a court order in July for a compensation totalling 800,000 yuan (S$162,000) to 34 former employees. The company had said it paid a total of 330,000 yuan to nine of the claimants.

At around the same period, China Construction Bank also commenced legal proceedings against the group and its subsidiaries.

There is also an outstanding sum of 3.6 million yuan of salaries and 8.1 million yuan of social security/insurance contribution to be settled, though no lawsuit has been filed yet in this regard.

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