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Midas to investigate more undisclosed corporations within group following audit irregularities
MIDAS Holdings will search for more potential undisclosed corporations within the group, as part of its action plan to address irregularities uncovered during the course of audit.
The manufacturer of aluminium alloy extruded products for the passenger rail transportation sector in China said in a bourse filing on Monday that the Legal Counsel in China had not found any other undisclosed corporations within the group other than those mentioned in a Feb 8 announcement, which included Jilin Midas Aluminium Industries Co and Luoyang Midas Aluminium Industries Co.
Other measures in the action plan include the appointment of a Chinese law firm as external Chinese legal counsel and a submission of information to external auditors to complete the year-end audit.
There will also be a change in legal representative of Dalian Huicheng Aluminium Co, Luoyang Midas Aluminium Industries Co, Jilin Midas Aluminium Industries Co, Jilin Midas Light Alloy Co, Shanxi Wanshida Engineering Plastics Co, and Jilin Midas Investments Co.
Luoyang Midas Aluminium Industries Co and Dalian Huicheng Aluminium Co are wholly-owned subsidiaries of Midas.
On Feb 8, Midas said that it uncovered several litigations, enforcement orders and court documents involving companies within the group during the course of audit and subsequent searches by the company's counsel.
Among these, there was an enforcement order filed against Jilin Midas Aluminium Industries, a wholly-owned subsidiary of the company incorporated in China, for previously undisclosed liability in the amount of 30 million yuan (S$6.3 million).
About 12 million yuan out of unaudited ledger balances of 873 million yuan as at Dec 31, 2017 for its Chinese subsidiaries was frozen by court orders, the group said then.
In addition, several freezing orders are outstanding which freeze certain shares owned by the group, including shares in Luoyang Midas Aluminium Industries Co and Dalian Huicheng Aluminium Co, and in CRRC Nanjing Puzhen Rail Transport Co, an associated company of Midas.
Midas' shares have been suspended since Feb 9.