(SINGAPORE) Sino-Environment’s dismissal of its financial controller last week has not only drawn a stern warning from the Singapore Exchange but also shed light on some contentious share transfers by its chairman and CEO.
These transactions have landed Sun Jiangrong in lawsuits across different jurisdictions, leading to freezing of his assets and the winding-up of his investment vehicle.
The Supreme Court of the British Virgin Islands (BVI) recently ordered that liquidators be appointed for Mr. Sun’s investment firm Thumb (China) Holdings. This order may implicate another S-chip Radiance Group, in which Thumb owns a 52.41 per cent stake.
Last week, SGX rapped Sino-Environment for firing its financial controller Raynauld Liang Wee Leong without consulting the board of directors and apparently without legitimate reasons.
With a tarred record of ‘questionable cash transactions’, a related police report and a default on $149 million convertible bonds, the group has been given 30 days to resolve governance issues or face delisting. Along with SGX’s warning letter, the group’s independent directors (IDs) also released a Hong Kong court judgment dated Oct 16.
The court ordered Mr. Sun to make further disclosure of his assets for a freezing order to be effective, and prohibited any share transfer in a Chinese property company Chongqing Dading - a move that the court ruled as an attempt to siphon off his assets beyond the reach of his creditors.
It all began with a $120 million personal loan that Mr. Sun obtained from hedge fund manager Stark Investments back in 2007. The loan was pegged to a pledge of all his shares in Sino-Environment and a further pledge of shares in Top One International (China) Property Group as top-up when Sino-Environment shares tanked.
Though Mr. Sun does not own stakes in Top One International, he is deemed a shadow director of the company and the share charge was made in his favour for a loan that he extended to the company previously.
When Mr. Sun defaulted on the Stark loan in February, Stark enforced its rights on Sino-Environment shares to recover part of the loan, wiping out his 56 per cent stake in the group.
But when Stark tried to enforce its rights on Top One International and appointed receivers in April, it found out that the company’s 100 per cent stake in Chongqing Dading Property - which owned properties in China worth 10 billion yuan (S$2 billion) - had been siphoned away to Mr. Sun’s Hong Kong firm called Top One Property Group.
Top One Property in turn tried to transfer Chongqing Dading shares to a Chinese firm majority-owned by Mr. Sun’s brother, Sun Shaofeng.
To protect its rights over the pledged shares, Stark obtained a Hong Kong court order in May, prohibiting Mr. Sun Jiangrong from dealing in the Chongqing Dading shares and a freezing order on these shares in mainland courts. Stark also secured approval for the appointment of receivers for Top One Property in Hong Kong.
On behalf of Stark, the trustee Bank of New York Mellon obtained a Singapore court order in August, forbidding any transfer of Radiance shares by Mr. Sun to his brother.
Mr. Sun Shaofeng is the chairman and managing director of Hong Kong-listed China Green Holding and on of the Forbes 400 Richest Chinese list.
In the judgment dated Oct 16, the Hong Kong court said that Mr. Sun Jiangrong’s intention to evade his liability was reinforced by how he dealt with Radiance shares, noting that he ‘had exhibited a very low degree of commercial morality indeed’.
Radiance Group disclosed this month that liquidators were appointed for its controlling shareholder Thumb. But it does not expect the winding up of Thumb to have any material impact on its main business activities and operations in Shanghai and Shenzhen.
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Sino-Env CEO faces suits, frozen assets
Liquidation order may implicate Radiance Group
By LYNETTE KHOO
16 November 2009
(SINGAPORE) Sino-Environment’s dismissal of its financial controller last week has not only drawn a stern warning from the Singapore Exchange but also shed light on some contentious share transfers by its chairman and CEO.
These transactions have landed Sun Jiangrong in lawsuits across different jurisdictions, leading to freezing of his assets and the winding-up of his investment vehicle.
The Supreme Court of the British Virgin Islands (BVI) recently ordered that liquidators be appointed for Mr. Sun’s investment firm Thumb (China) Holdings. This order may implicate another S-chip Radiance Group, in which Thumb owns a 52.41 per cent stake.
Last week, SGX rapped Sino-Environment for firing its financial controller Raynauld Liang Wee Leong without consulting the board of directors and apparently without legitimate reasons.
With a tarred record of ‘questionable cash transactions’, a related police report and a default on $149 million convertible bonds, the group has been given 30 days to resolve governance issues or face delisting. Along with SGX’s warning letter, the group’s independent directors (IDs) also released a Hong Kong court judgment dated Oct 16.
The court ordered Mr. Sun to make further disclosure of his assets for a freezing order to be effective, and prohibited any share transfer in a Chinese property company Chongqing Dading - a move that the court ruled as an attempt to siphon off his assets beyond the reach of his creditors.
It all began with a $120 million personal loan that Mr. Sun obtained from hedge fund manager Stark Investments back in 2007. The loan was pegged to a pledge of all his shares in Sino-Environment and a further pledge of shares in Top One International (China) Property Group as top-up when Sino-Environment shares tanked.
Though Mr. Sun does not own stakes in Top One International, he is deemed a shadow director of the company and the share charge was made in his favour for a loan that he extended to the company previously.
When Mr. Sun defaulted on the Stark loan in February, Stark enforced its rights on Sino-Environment shares to recover part of the loan, wiping out his 56 per cent stake in the group.
But when Stark tried to enforce its rights on Top One International and appointed receivers in April, it found out that the company’s 100 per cent stake in Chongqing Dading Property - which owned properties in China worth 10 billion yuan (S$2 billion) - had been siphoned away to Mr. Sun’s Hong Kong firm called Top One Property Group.
Top One Property in turn tried to transfer Chongqing Dading shares to a Chinese firm majority-owned by Mr. Sun’s brother, Sun Shaofeng.
To protect its rights over the pledged shares, Stark obtained a Hong Kong court order in May, prohibiting Mr. Sun Jiangrong from dealing in the Chongqing Dading shares and a freezing order on these shares in mainland courts. Stark also secured approval for the appointment of receivers for Top One Property in Hong Kong.
On behalf of Stark, the trustee Bank of New York Mellon obtained a Singapore court order in August, forbidding any transfer of Radiance shares by Mr. Sun to his brother.
Mr. Sun Shaofeng is the chairman and managing director of Hong Kong-listed China Green Holding and on of the Forbes 400 Richest Chinese list.
In the judgment dated Oct 16, the Hong Kong court said that Mr. Sun Jiangrong’s intention to evade his liability was reinforced by how he dealt with Radiance shares, noting that he ‘had exhibited a very low degree of commercial morality indeed’.
Radiance Group disclosed this month that liquidators were appointed for its controlling shareholder Thumb. But it does not expect the winding up of Thumb to have any material impact on its main business activities and operations in Shanghai and Shenzhen.
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