SIAS calls for probe into alleged mismanagement in 3 S-Chips
Singapore
THE Securities Investors' Association (Singapore), a local investors' lobby group, on Thursday called on the authorities in Singapore and China to investigate what it alleges are instances of financial mismanagement at three S-Chips, namely China Fibretech, China Environment and China Sky Chemical Fibre.
All three have been suspended from trading.
The association, also known as SIAS, said it hopes the authorities will "help settle the issues facing these companies so that auditors can complete the audits, thereby allowing the companies to request trading of their shares"; it added that for all three companies, "the conduct by the officers, in particular, the promoters, caused losses to shareholders".
Some S-Chip officers' "unethical actions" resulted in trading suspensions and that shareholders are unable to claim back their losses in Singapore, it said. SIAS thus wants the Singapore authorities to "make an urgent request and collaborate with the relevant overseas authorities to investigate" possible offences with respect to "funds raised in Singapore and transferred to China or elsewhere and dealt with inappropriately".
It also expressed hope that the shareholders of these suspended S-Chips will be given updates "from time to time".
SIAS's statement comes more than a year after the chief regulatory officer of the Singapore Exchange in November 2015 flagged disclosure concerns over Singapore-listed companies with operations in China, and warned investors to pay attention to financial irregularities.
Last April, the bourse said it had teamed up with major Chinese bank China Construction Bank to bring more Chinese companies to list in Singapore.
SIAS had the most to say about China Fibretech of the three S-chips it named. It said the S-Chip's chairman and chief executive officer Wu Xinhua had approved payment for customers' compensation claims without the permission of the board, and to date had not provided proof that the company had probed those claims.
Mr Wu also defaulted on a promised meeting with SIAS arranged by independent directors, the association said, adding that China Fibretech shareholders could consider options such as asking for an extraordinary general meeting or a special audit.
On China Environment, SIAS noted the company has started a lawsuit against its former chairman Huang Min and has also made a police report against him and his family members.
For China Sky, the association said the S-chip has filed suit against Zheng Kai Su, formerly its director. The stock, suspended from trading since last August, had resumed trading in September 2015 following a four-year suspension over suspected regulatory breaches by its former chief executive Huang Zhong Xuan.
