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Foreland Fabrictech says does not know full amount it owes in Chinese court judgment over undisclosed lawsuit
SUSPENDED Chinese textile maker Foreland Fabrictech has not been informed of the interest and late payment amounts on a loan agreement involving its former chairman, the company said on Monday night in response to queries from the Singapore Exchange (SGX).
The size of those charges, slapped on top of a private loan of 7 million Chinese yuan (S$1.4 million), will be known only when the loan is repaid to the Quanzhou People’s Court in China, according to the company.
Meanwhile, real estate purchases and rentals and high-speed rail travel are some of the spending restrictions imposed by the court on Foreland Fabrictech and its wholly owned Fujian Jinjiang Fulian Knitting subsidiary, the company told SGX, when pressed for more details on the Chinese court's judgment.
The SGX has queried Foreland Fabrictech - which is insolvent - over its revelation on July 9 of the Chinese court enforcement notice for an old lawsuit over the 7 million yuan loan, which the present board said it had not known about.
The loan agreement with one Hong Youling was entered into by the company and its subsidiary, as well former executive chairman Tsoi Kin Chit, former executive director Cai Fengquan and another Chinese company.
Foreland Fabrictech earlier said that the court judgment from August 2014 held the parties involved responsible for the unspecified "double payment of the interest charged and/or late payment charges incurred for late payment of the loan amount". It has now added that the borrowers are also on the hook for a "case acceptance fee" of 71,580 yuan, which is owed to the court.
The company also told the bourse that it has been hit with nine types of spending restrictions, which apply to the company's "legal representative(s), main person-in-charge, the person-in-charge who has direct impact on the repayment of liabilities, actual controller".
Mr Tsoi, who resigned in 2016 and later received a public reprimand from the SGX, has been accused by Foreland Fabrictech of going rogue with its Fulian Knitting Co unit.
The company said in May 2018 that it "may have lost control" of that subsidiary, as directors do not have full access to its funds and Mr Tsoi has allegedly declined to turn over the position of legal representative for the subsidiary to executive chairman Yang Meng Yang.
Foreland Fabrictech has also previously said that it "will continue to vigorously pursue the legal proceedings" against Mr Tsoi and that it is seeking legal advice on the matter of the loan-related lawsuit.