SGX threatens to delist firm if it fails to improve its governance practices
By Goh Eng Yeow 14 November 2009
The Singapore Exchange (SGX) is threatening to delist waste recycler Sino-Environment if it fails to brush up on its governance practices.
This follows new controversy that is engulfing the troubled firm - the dismissal of Mr. Liang Wee Leong Raynauld, the financial controller of its Singapore unit, four days ago for alleged misconduct and breach of duties.
Its two independent directors - Mr. Goh Chee Wee and Dr Wong Chiang Yin - said in a statement yesterday they were not consulted over Mr. Liang’s dismissal.
They also expressed concern over the ‘clear failure of corporate governance within the company’, maintaining Mr. Liang’s dismissal should have been a decision of the board, not management.
This is because his responsibilities as head of finance ‘were essentially similar to that of the chief financial officer’, after the firm lost its last CFO in June.
But no board resolution to approve Mr. Liang’s dismissal had been circulated to the independent directors and the matter had not been tabled at any board meeting for discussion, they said.
The SGX weighed in with a statement yesterday, noting with concern that ‘the summary dismissal and the questionable governance surrounding this dismissal exhibit poor corporate governance, as stated by the independent directors’.
‘With the summary dismissal of Mr. Liang on Nov 10, it would follow that the company is without a chief financial officer,’ it added.
The quarrel over Mr. Liang’s dismissal is the latest in a series of problems to have hit the firm since founder Sun Jiangrong said in March that he had lost control of the firm after his stake had been seized, following a default on a $65 million loan made to him by a hedge fund.
Mr. Sun’s loan default, in turn, plunged the firm into financial difficulty because it gave holders of a $149 million bond issued by the firm an option to get their money back early.
The firm’s problems simply snowballed after that. Last month, it said a review by its auditors, PricewaterhouseCoopers, had ‘identified certain questionable cash transactions and matters which may have a significant impact on the company’s financial position’. It had also forwarded the auditors’ findings to the Commercial Affairs Department, and the relevant authorities in China.
The firm has also not been able to release its financial results for the first and second quarters, despite repeated extensions granted by the Singapore Exchange.
SGX said yesterday that, given the questionable cash transactions identified by the company’s auditors, Sino-Environment ‘must take immediate steps to bring itself into compliance with listing rules, including implementing proper corporate governance practices’.
‘In view of the seriousness of the developments... the SGX urges all directors to take urgent steps to ensure that any remaining assets and operations of the company are safeguarded and to act in the interest of shareholders as a whole,’ it added.
Sino-Environment was suspended from trading on Sept 17 when it closed at 13.5 cents.
1 comment:
Sino-Env gets flak over sacking of finance head
SGX threatens to delist firm if it fails to improve its governance practices
By Goh Eng Yeow
14 November 2009
The Singapore Exchange (SGX) is threatening to delist waste recycler Sino-Environment if it fails to brush up on its governance practices.
This follows new controversy that is engulfing the troubled firm - the dismissal of Mr. Liang Wee Leong Raynauld, the financial controller of its Singapore unit, four days ago for alleged misconduct and breach of duties.
Its two independent directors - Mr. Goh Chee Wee and Dr Wong Chiang Yin - said in a statement yesterday they were not consulted over Mr. Liang’s dismissal.
They also expressed concern over the ‘clear failure of corporate governance within the company’, maintaining Mr. Liang’s dismissal should have been a decision of the board, not management.
This is because his responsibilities as head of finance ‘were essentially similar to that of the chief financial officer’, after the firm lost its last CFO in June.
But no board resolution to approve Mr. Liang’s dismissal had been circulated to the independent directors and the matter had not been tabled at any board meeting for discussion, they said.
The SGX weighed in with a statement yesterday, noting with concern that ‘the summary dismissal and the questionable governance surrounding this dismissal exhibit poor corporate governance, as stated by the independent directors’.
‘With the summary dismissal of Mr. Liang on Nov 10, it would follow that the company is without a chief financial officer,’ it added.
The quarrel over Mr. Liang’s dismissal is the latest in a series of problems to have hit the firm since founder Sun Jiangrong said in March that he had lost control of the firm after his stake had been seized, following a default on a $65 million loan made to him by a hedge fund.
Mr. Sun’s loan default, in turn, plunged the firm into financial difficulty because it gave holders of a $149 million bond issued by the firm an option to get their money back early.
The firm’s problems simply snowballed after that. Last month, it said a review by its auditors, PricewaterhouseCoopers, had ‘identified certain questionable cash transactions and matters which may have a significant impact on the company’s financial position’. It had also forwarded the auditors’ findings to the Commercial Affairs Department, and the relevant authorities in China.
The firm has also not been able to release its financial results for the first and second quarters, despite repeated extensions granted by the Singapore Exchange.
SGX said yesterday that, given the questionable cash transactions identified by the company’s auditors, Sino-Environment ‘must take immediate steps to bring itself into compliance with listing rules, including implementing proper corporate governance practices’.
‘In view of the seriousness of the developments... the SGX urges all directors to take urgent steps to ensure that any remaining assets and operations of the company are safeguarded and to act in the interest of shareholders as a whole,’ it added.
Sino-Environment was suspended from trading on Sept 17 when it closed at 13.5 cents.
Post a Comment