Oriental units in China face claims over unauthorised guarantees

Singapore

ORIENTAL Group said on Tuesday that two subsidiaries in China face legal claims over unauthorised guarantees that had been given for a company linked to two of its directors.

The steel trading and manufacturing company has set up an independent review committee to investigate the matter and the company's options. The two directors, non-executive chairman Wu Dingron and his son-in-law Sun Lu, have taken an immediate leave of absence and have been stripped of all authority at the company.

Oriental said that around Nov 11, 2013, the common seal of wholly owned subsidiary Jiangyin Chengsheng Machinery Manufacturing Co (JYCS) was used to provide a guarantee for a 30 million yuan (S$5.54 million) loan taken by Jiangyin Rongda Jingmao Co from China Merchants Bank Co…