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China Gaoxian reveals 3 undisclosed interested person transactions in 2016
YARN supplier China Gaoxian Fibre Fabric Holdings revealed on Thursday three interested person transactions (IPTs) during its financial year ended Dec 31, 2016 which had not been previously disclosed.
It had discovered these while preparing for the circular to seek shareholder approval for the proposed disposal of Huaxiang China Gaoxian International Holdings, which did not end up getting the nod.
In the first case, controlling shareholder Lin Liangzhu loaned 4.4 million yuan to Changle Guangda Trading at an interest rate of 12 per cent a year.
In the second, Fujian Changle Huachuang Micro Credit, an associate of Mr Lin and another controlling shareholder Ye Chunyan loaned 30.3 million yuan to Guangda at an interest rate of 12 per cent per annum. Also, Fuzhou Huayi International Trading Co, an associate of Ms Ye, entered into transactions with Zhejiang Huagang Polyester Industrial for the purchase and sale of raw materials and goods.
The company's audit committee believes that the undisclosed IPTs, including the credit terms, are on normal commercial terms extended to or by unrelated third parties or otherwise in accordance with applicable industry norms, and are not prejudicial to the interests of the company and its minority shareholders, after considering the terms and rationale for the undisclosed IPTs, including the credit terms.
It also believes the lapse in disclosure was "unintentional and due to inadvertent oversight". It believes no further action will be necessary, saying that these transactions were concluded and cannot be reversed and there is no current or ongoing risk arising from such past transactions, and there was no prejudice to shareholders.
The loans have since been repaid and the purchase and sale of raw materials and goods was required in the ordinary course, it added.