New chairman's 18 lawsuits in China are a non-issue: Nutryfarm

Singapore

NUTRYFARM International said it is satisfied with Wu Yongqiang's character and integrity for him to be appointed as the company's new executive chairman even though he is involved in 18 civil suits in China as the company has assessed that these cases are commercial in nature.

The mainboard-listed durian and health foods distributor said in a filing on the Singapore Exchange (SGX) on Tuesday (Mar 15) that the company's nominating committee has reviewed each of the civil suits, along with an opinion report from Guangdong Guanghe law firm, and has assessed that they do not involve fraud, dishonesty, misrepresentation, misconduct or mismanagement on the part of Wu.

Nutryfarm also said that there is no potential conflict of interest between its business and KTL Global, a fresh vegetable and fruits distributor which Wu is serving on its board as a non-executive chairman.

It said that the businesses of both companies do not overlap.

The company's filing is a response to queries from the bourse operator after it announced on Mar 9 that it had appointed Wu as its new executive chairman.

It also said that Wu has been a substantial shareholder of Nutryfarm since Jun 30, 2021, and that he owns a 13.97 per cent stake in the durian and health foods distributor as at Mar 9, 2022.

In addition to concerns about whether there is a potential conflict of interest, considering that Wu is the chairman of both Nutryfarm and KTL Global and has substantial shares in them, SGX had asked Nutryfarm's nominating committee for its assessment of Wu's role and accountability for the relevant debts in each of the 18 civil suits, and whether this affects his ability to meet the listing requirements relating to the character and integrity of directors, especially considering that he made the decision not to pay the debts owed in these civil suits.

Nutryfarm's nominating committee said, in response to these queries, that Wu has clarified that he genuinely believes that he is not at fault, and that there is no commercial ambiguity on whether he should assume partial or full liability even though the judgments of these cases have not been executed.

"Accordingly, he claims to have made contributions which he has deemed fair and equitable to the satisfaction of some of these judgments. As such, no further action has been taken by the creditors

and/or the courts against him," read the filing.

While Wu had made these declarations, Nutryfarm's nominating committee noted that it has obtained an undertaking from him indicating that he has sufficient financial resources to satisfy any outstanding judgments which may be enforced against him, and take all necessary steps to pay or satisfy these judgments or come to a settlement with creditors in the event that they begin bankruptcy proceedings against him.

Wu also pledged to resign from Nutryfarm's board if he becomes a bankrupt or if any developments to these civil suits disqualify him or severely affect his ability to continue as a director.

Nutryfarm shares closed unchanged at S$0.097 on Tuesday.