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Slew of resignations hit Foreland Fabrictech
A SPATE of resignations hit Chinese textile maker Foreland Fabrictech Holdings Ltd, which said on Tuesday that its executive chairman, an executive director and a non-executive director have thrown in the towel.
The resignations of executive chairman Tsoi Kin Chit, executive director Zhang Hong Lai and non-executive director Chen Chao Ying - all under the reason of pursuing "personal interest" - follow the completion of an independent review in May by independent auditors BDO.
Among its key findings, the special audit report cast doubts on the veracity of a purported defective dyed textile, the related complaint made by a customer Jiangxi Longdu, and the claim made by Jiangxi Longdu against Foreland Fabrictech's unit Fulian.
The dyed textile in question was delivered to Jiangxi Longdu in October 2013 and it was to be used to manufacture winter jackets for Mega Chinese Ltd.
A substantial compensation of 282.99 million yuan (S$57 million) was paid by Fulian to Jiangxi Longdu, even though there was no due process in assessing the accuracy and veracity of the items listed in the "List of Economic Losses" when these form the basis of Jiangxi Longdu's claim against Fulian as well as the veracity of the contract between Jiangxi Longdu and Mega Chinese, among other critical factors.
The independent auditors were also unable to confirm the bank balance and fixed deposit balance of Fulian totalling 292.3 million yuan in Chinese banks as of Dec 31, 2013.
Foreland Fabrictech said on Tuesday that it has appointed Yang Meng Yang, 28, as executive director and chairman of the board. It has also identified a professional accounting firm in Singapore to be the statutory auditors of the company.