China police probed former Midas boss over subsidiary's loans: Midas board

UNBEKNOWN to the company, the former executive chairman of troubled railway parts maker Midas Holdings had been under investigation by China's Economic Crime Investigation Unit before his resignation, Midas said on Tuesday.

In an exchange filing, the Midas board said it had learnt that two banks in China's Jilin province had advised Midas subsidiary Jilin Midas Light Alloy (JMLA) that the police had paid visits to their branches to investigate Chen Wei Ping.

The police were from the Economic Crime Investigation Unit and Mr Chen is suspected for fraud relating to certain loans, the board said.

JMLA's two banks - China Development Bank and the Export-Import Bank of China in Jilin - also made requests to JMLA to provide them with explanations within five days from March 30.

In a letter dated March 30, the banks had sought information on JMLA's repayment plans for past due loans, Mr Chen's involvement in certain loans, and the financial and operational conditions of Midas, among other things.

On March 30, Mr Chen was still the executive chairman of Midas, before he resigned on April 2.

However, he did not declare to the board that he was assisting in a police investigation, the board said.

Midas is under investigation by the Singapore authorities, and its shares remain suspended.