Midas board flags suspicion with rubber seal and signatures in loan-guarantee documents

THE board of troubled Chinese firm Midas Holdings said an alleged board resolution that had been used to provide liability guarantees for 400 million yuan (S$82.3 million) in loans was sealed with a rubber seal meant for parcel deliveries, and not with the company's common seal, it said in a regulatory filing on Wednesday.

The rubber seal is "commonly used to acknowledge receipt of parcels from couriers", said Midas, recounting evidence that had been presented in the Jilin High People's Court on June 26, 2018. The actual common seal is kept in Singapore, and meant to be used on important documents. 

According to the board resolution, two directors Chan Soo Sen and Tong Din Eu had abstained from voting on it. But Mr Chan and Mr Tong were not aware of the board meeting convened at the company as stated in the board resolution, nor were they informed of such a board meeting or resolution, Midas said. "Both Mr Chan and Mr Tong were absent at the signing and no effort to ratify the resolution was made."

As a result, the chief financial officer of the company has no record of the three loans made by Jilin Midas or the board resolution that approved the 400 million yuan guarantee. 

It is also unclear whether  former CEO Patrick Chew had signed the board resolution, given that photos of Mr Chew signing certain documents were submitted as court evidence. The board noted that the signature of Mr Chew is in Chinese, and not his usual signature.

"If Mr Chew did sign the board resolution, it will contradict his earlier denial about his ignorance of the underlying loans related to the guarantee. If Mr Chew did not sign the board resolution, then forgery may have occurred."