Monday 14 December 2009

$40m in coffers? Sino-Env EDs have no quick answer

Sino-Environment executive directors (EDs) appear to have backtracked on the claim made by the group chairman about having $40 million in the company’s coffers after the Singapore Exchange (SGX) asked them to substantiate the claim.

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Guanyu said...

$40m in coffers? Sino-Env EDs have no quick answer

By LYNETTE KHOO
04 December 2009

Sino-Environment executive directors (EDs) appear to have backtracked on the claim made by the group chairman about having $40 million in the company’s coffers after the Singapore Exchange (SGX) asked them to substantiate the claim.

The EDs yesterday said they could confirm that the group has $17.2 million, of which $3.2 million is in the company’s HSBC account in Singapore and the balance of about $14 million in its bank account in Xiamen.

They added that the group has at least 70 million yuan (S$14.1 million) in its various bank accounts in China but they were unable at this time to confirm the exact amount of cash in yuan and the details of the bank accounts where these funds are deposited.

The EDs explained that when chairman Sun Jiangrong mentioned the sum of $40 million to David Gerald, president of Singapore Investors Association of Singapore (SIAS), ‘he spoke without reference to specific records and meant to refer to an estimated aggregate amount which included trade and other receivables’.

SGX queried the EDs on the ‘selective disclosure of material information’ by Mr. Sun, referring to newspapers carrying reports on his phone conversation with Mr. Gerald. Mr. Sun’s claims were relayed to shareholders at an SIAS-organised meeting held on Monday to discuss issues facing the group - including ‘questionable cash transactions’ flagged by its auditors and a default on $149 million convertible bonds.

The Exchange asked the EDs to provide specific details to substantiate Mr. Sun’s claims on the cash reserves and how the money had been invested. It also urged the EDs to provide an undertaking to all shareholders via SGXNet that, should the independent directors (IDs) agree to their conditions, they would transfer all the funds in the group’s bank accounts in China to a Singapore bank account controlled by the IDs.

But in response, the EDs said they were unable to obtain the detailed information to these questions due to insufficient time and lack of staff support after some resignations in its Chinese subsidiaries. The EDs added that they would ‘endeavour to release the announcement at the soonest possible time’.