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China Environment unit loses civil suit, ordered to pay loan plus interest
CHINA Environment's wholly owned subsidiary Fujian Dongyuan Environmental Protection Co (FJDY), has lost a civil suit brought by Zhongxin Bank in China.
On Nov 2 last year, FJDY had received a letter from the bank, claiming repayment of overdue interest for a loan.
In the latest announcement released to the Singapore Exchange on Tuesday, China Environment said that judgement was awarded to the plaintiff. As a result, FJDY is liable for a loan of 36.67 million yuan (S$7.6 million) and loan interest of 563,870 yuan; this is due within 10 days of the effective date of judgement, together with punitive interest of 9.46125 per cent annually from Dec 19, 2016 up to the full settlement date.
If FJDY does not make payment, Zhongxin Bank has the right to sell off FJDY's land use rights and property assets that were pledged as security for this loan. In such an instance, Zhongxin Bank will be entitled to claim the first 21.4 million yuan in sales proceeds received, as well as the 19.65 million yuan of trade receivables FJDY has pledged to Zhongxin Bank for this loan.
The guarantors, former China Environment chairman Huang Min and his wife Chen Fen Hua, are liable for the remaining sum in the event that the value of the pledged assets cannot fully satisfy the amount due to Zhongxin Bank. "The guarantors have right to claim compensation against FJDY," China Environment said.
FJDY shall pay Zhongxin Bank 99,500 yuan in legal fees and a property preservation fee of 5,000 yuan within 10 days from the judgement date. The court costs of 229,234 yuan are to be borne by FJDY, Huang Min and his wife.