THE Singapore Exchange (SGX) has reprimanded New Lakeside Holdings, which has been renamed Zhongxin Fruit & Juice since Mar 2013, its former director and former group chief financial officer (CFO) for breaching listing rules and corporate governance failures.
In 2010, the company's audit committee had engaged Stone Forest Corporate Advisory to review the business operations and internal controls of selected entities of New Lakeside.
The review found that New Lakeside had failed to disclose material and accurate information on a corporate guarantee which had turned into a liability, thereby breaching Rule 703 of the SGX listing manual.
Rule 703 was subsequently breached again on several other occasions, based on Stone Forest's review.
From SGX's assessment, the former executive director of New Lakeside, Go Twan Heng, had failed to act in the interest of shareholders as a whole, thus breaching Rule 103(5). SGX also notes the involvement of the then-group CFO Oh Gim Teck in the rule breaches.
Stone Forest's review also found that New Lakeside failed to safeguard its own interests and that of its shareholders, while it was listed on Sesdaq, the secondary board of SGX.
During the period from November 2010 to December 2012 when the company was placed under judicial management, the judicial managers had put in place a proposal which involved the restructuring of the company, injection of funds by the company's controlling shareholder, SDIC Zhonglu Fruit Juice, and the implementation of a scheme of arrangement with creditors of the company.
The proposal was completed in February 2013, and a new board and management team were appointed.
"SGX-listed companies are advised to consult the exchange before they appoint Mr Go or Mr Oh as a director or member of management," SGX said.