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Midas says judicial manager is trying to sell unit's assets against its will

THE judicial manager of the principal operating subsidiary of troubled railway parts maker Midas Holdings is trying to sell its assets without the group's consent, the group said on Tuesday.

According to a report seen by the group dated Jan 5, Jindou Investment Holding Group (Jindou Group) had signed an agreement with Jilin Province Qiming Bankruptcy Liquidation Co, the judicial manager of Jilin Midas, to acquire Jilin Midas's assets for 1.76 billion yuan (S$352 million) on Dec 30, 2018.

Midas Holding said that it views this agreement to be invalid, for various reasons.

First, the judicial manager had continued to deal with Ma Ming Zhang as the legal representative of Jilin Midas even when the company had made the announcement to remove Mr Ma and appoint Xu Wei Dong as Jilin Midas’s legal representative on April 6 last year.

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The Singapore Exchange had also pronounced Mr Ma unfit to hold executive positions in the group in that same announcement.

Midas also alleged that Jilin Midas’s judicial manager had disallowed Dr Xu to assume his appointment as legal representative of Jilin Midas. The judicial manager also failed to update Dr Xu and Midas Holdings about its negotiations with Jindou Group.

Midas Holdings said: "The board of Midas Holdings had not approved anyone to enter any such agreement on behalf of Jilin Midas. Ever since Jilin Midas was administered by the judicial manager, the judicial manager has not provided the company with the audit report, creditors report nor document who was responsible for the debacle at Jilin Midas."

Likewise, Midas was not appraised as to how the sale price of 1.76 billion yuan for the assets was arrived at, it said.

Midas Holdings, through Dr Xu, will appeal to the Liaoyuan government on behalf of the board to set aside the proposed sale of assets belonging to Jilin Midas to Jindou Group.

A second creditor’s meeting is scheduled to be held on Jan 22 to discuss and vote on the proposed sale of assets to Jindou Group. The veracity of various creditors' claims will also be discussed then.