Innopac receives letter of demand on negative balances of accounts maintained by 2 subsidiaries

INNOPAC Holdings on Wednesday said it received a letter of demand from Saxo Bank, which is seeking a payment of S$14.69 million on negative balances under accounts maintained by two of Innopac's subsidiaries - Heritage Investment Corporation and Wang Da Investment. The letter of demand, dated June 1, was sent on behalf of the Danish bank by Rajah & Tann Singapore LLP. 

In a filing with the Singapore Exchange, Innopac said that the Danish bank alleges the company is liable for the claim on the purported basis of a Memorandum of Understanding dated Dec 24, 2013 despite the said negative account balances being incurred by the subsidiaries without any guarantee by Innopac.

The company added that at present, no legal proceedings have been commenced by Saxo against Innopac, and "the group will be evaluating the basis and merits of the claim and will take appropriate action accordingly".

Pending the resolution of the claim, the board is of the view that the company is unable to reasonably assess and inform the market of its financial position and will be requesting for trading of its shares to be suspended.

Innopac shares last traded at S$0.002 on June 1. The company requested for a trading halt on June 4.