Trading China Sky: What's holding it up?

IT has been nearly three long years since trading in the shares of China Sky Chemical Fibre was suspended. But the company's shareholders continue to suffer from their inability to deal in its stock despite pleas by the company to restore trading. The action against China Sky followed non-compliance of a Singapore Exchange directive to the China-based manufacturer of nylon products to appoint a special auditor to look into certain transgressions, including certain undisclosed interested party transactions and a land purchase. The exchange had also raised queries over the extraordinarily high cost for maintenance and upgrading of its factory.

The company asked for suspension of trading in November 2011. The following month, SGX issued a reprimand to its entire board for their failure to appoint the special auditor. All three independent directors then resigned when out-voted by the four China-based directors who were opposed to appointing the special auditor. The company's chief executive and largest single shareholder, Huang Zhong Xuan, together with his chief financial officer Sunny Hui, also resigned from their posts, leaving the company almost crippled.

The Commercial Affairs Department (CAD) were then brought in to investigate possible breaches of the Securities and Futures Act.