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China Sky Chemical Fibre looking to restructure via RTO

CHINA Sky Chemical Fibre Co Ltd is looking to restructure via a reverse takeover (RTO) even as it continues to grapple with outstanding financial and legal troubles.

It listed a diverse range of projects that may potentially be injected into the group, including rural urbanisation projects in Beijing Huairou District, retirement living, health pension as well as tourism comprehensive development projects.

The Fujian-based nylon fibre maker said on Monday that it is also looking at Fujian eco-agricultural tourism industry chain comprehensive development, food processing, "Tang Baoxiang" and other brands of vegetarian food franchise, breakfast van to be operated by military families, and "sociality and consumer data operation project".

The beleaguered group had in October last year filed a lawsuit in Singapore's High Court against former non-executive director Zheng Kai Su for what it claimed was "fraudulent and/or unauthorised use of the group's funds and the fraudulent and/or unauthorised use of the group's assets as collateral for securing loans".

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It had since filed an application to serve the lawsuit documents on Mr Zheng in China on March 13 this year and has been requesting updates from the Court on the status of the service of the documents.

On Sept 19, however, the group was informed that the Ministry of Foreign Affairs Beijing Mission had no updates on the status of the service of the documents.

Meanwhile, its Chinese subsidiary Qingdao Zhongda Chemical Fibre Company Ltd is facing several lawsuits filed against it before the change of its legal representative.

"The group's legal advisors and accounting firms are currently dealing with the lawsuits with main objective in protecting the group's interest," China Sky said.

The company is still waiting for the Chinese authority to approve the change of legal representative from Yu Guang to He Zhiping, brother of group chairman He Zhidong.

But due to the many unresolved issues surrounding its other subsidiaries Quanzhou Tianyu Chemical Fiber & Weaving Industry Co Ltd and Tianjian Special Polymede Fibre Technology Fujian Co Ltd, the group said it is impossible to find anyone willing to take up the position of a legal representative for them. The proposed change on legal representatives for these subsidiaries has not taken effect.