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Midas Holdings obtains court documents on legal cases
MIDAS Holdings announced after trading hours on Thursday that its legal counsel in the People's Republic of China had obtained court documents regarding three legal cases associated with the group.
According to the civil complaints filed to the court, Jilin Provincial Micro Refinancing Corporation sued nine parties on Dec 7, 2017.
The group said that legal representatives Ma Ming Zhang, Sun Qi Xiang, Yang Xiao Guang and Chen Wei Ping did not report to the board of directors of Midas Holdings about the litigations. The audit committee knew about the loans only on March 14, 2018.
Jilin Provincial Micro Refinancing Corporation had lent a total of 379 million yuan to Jilin Midas Aluminium Industries; of which 180 million yuan (Loan 1) and 129 million yuan (Loan 2) are for the period of one month and at an annual interest rate of 15 per cent.
The balance of 70 million yuan (Loan 3) is for the period of 12 months and at an annual interest rate of 10 per cent.
Loan 1 was entered on May 24, 2017 for the stated purpose to repay loans borrowed from Postal Savings Bank of China, Jilin Provincial Branch and had been extended to Sept 23, 2017, and again extended to Aug 23, 2018. The legal representatives from the group did not seek approval from the board for the guarantee and pledge under Loan 1. The group said that the audit committee is not able to establish the actual use of the proceeds of Loan 1.
Similarly, the legal representatives from the group did not seek approval from the board for the guarantee and pledge under Loan 2 and Loan 3. Midas Holdings' CEO, Patrick Chew, stated that he did not know how Loan 2 transpired and had not authorised the use of his legal representative stamp.
There was also a court order from Nanjing Xuan Wu District Court dated Aug 16, 2017 involving Luoyang Midas and an unauthorised guarantee to a third party.
In addition, a lady named Ning Xiao Fei sued five parties related to Midas Holdings.
Ms Ning had entered into three loans agreements with Jilin Midas Light Alloy on Sept 26, 2016 for a total of 23.5 million yuan and another loan agreement for 7 million yuan on Oct 14, 2016. Ms Ning also sued for interest of 10 million yuan.
Again, CEO Mr Chew stated that he did not know of the loans and had not authorised the use of his legal representative stamp.
Midas Holdings said that their PRC legal counsel could not get other necessary documents from the legal representative of Jilin Midas to execute the power-of-attorneys. As such, the audit committee could not provide an update on the litigation relating to Jilin Midas.
The group said that the audit committee will issue further announcements when there are material developments in the matter.