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Asia Fashion Holdings suspends trading on liquidity, going concern issues
THE board of Asia Fashion Holdings has suspended trading in the company's shares, citing liquidity and going concern issues.
Company directors said in an announcement on Friday night that "the board is of the view that the company is not in a position to assess reasonably its financial position and could have a potential going concern issue until further sources of liquidity are raised", with the difficulty in raising cash affecting Asia Fashion's ability to pay an independent reviewer, Ernst & Young Advisory.
"The group is currently experiencing difficulties in gaining access to new sources of liquidity," the board said.
It added that Asia Fashion is in talks with a substantial shareholder "with an aim to obtaining financial support to address any going concern issues and to satisfy the payment obligations in respect of the independent review". But the board noted that the outcome of the negotiations "is not yet known" and added that there is no guarantee of a favourable outcome.
It said that it will continuously assess Asia Fashion's ability to continue as a going concern "as new information becomes available" and will inform shareholders as and when there are material updates on the matter.
The Shanghai-based distributor and the Singapore Exchange together appointed EY in June to carry out an independent review over transactions involving two companies as well as "any potentially questionable bank transactions" from July 2013 to May 2018.
Asia Fashion last traded at 6.4 Singapore cents on Aug 16.