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Sunday, 22 November 2009
Sino-Environment exec directors hit back at IDs
In what may be the start of a war of words, executive directors (EDs) at Sino-Environment Technology Group have hit back at the company’s independent directors (IDs), hurling accusations against them and its sacked financial controller.
They defend sacking of financial controller and refuse to step down
By LYNETTE KHOO 19 November 2009
In what may be the start of a war of words, executive directors (EDs) at Sino-Environment Technology Group have hit back at the company’s independent directors (IDs), hurling accusations against them and its sacked financial controller.
In an SGX filing yesterday, the executive directors stated their grounds for dismissing financial controller Raynauld Liang Wee Leong and accused the IDs of denying them access to crucial findings by the company’s auditors. They also objected to certain professional fees paid.
The executive directors are chairman Sun Jiangrong, whom the EDs say is on official leave of absence, acting CEO You Shengquan, and chief technical officer Li Shouxin.
They claim that Mr. Liang had instructed 21 announcements to be released on SGXnet without the knowledge of the acting CEO and had failed to pay interest for the convertible bonds falling due on July 8, causing an event of default - this despite the group having remitted $5 million from China to its Singapore account for paying the $2.98 million interest.
The executive directors also accused Mr. Liang of making an announcement on July 9 ‘containing a misleading and an untruthful statement’ that the company was unable to make the interest payment due on the CBs on July 8.
Responding to the recent sacking of Mr. Liang, the IDs have said the summary dismissal was illegitimate and unlawful. This in turn drew a rap from SGX, which gave the company a 30-day deadline to resolve governance issues or face delisting.
The latest development followed dramatic twists at Sino-Environment, from a loss of a controlling stake by Mr. Sun, a near-departure of management team, a default on $149 million convertible bonds to ‘questionable cash transactions’ flagged by auditors.
Yesterday, the EDs also voiced their dissent towards the IDs - Goh Chee Wee and Wong Chiang Yin - and said they cannot accede to the IDs’ requests that the executive directors resign at this critical moment for the group.
One grievance they cited was the denial of access to findings by PricewaterhouseCoopers (PwC). In October, PwC raised certain questionable cash transactions in the group, which prompted the IDs to lodge police reports in Singapore, Hong Kong and China.
The EDs explained that the cash reserves are in Xiamen International Bank in China to ensure smooth operation of the subsidiaries in China. They noted their requests for details on PwC’s findings were turned down, which prevented them from addressing any issues or allegations. And since they were not consulted on the appointment of the special audit, they have objected to the special audit fees of $952,874.
According to SGX listing rules, however, the audit committee consisting of IDs can direct the appointment of special auditors.
The executive directors also claimed that they were not kept informed of actions or advice from independent financial advisor nTan Corporate Advisory, which was paid a sum of $3 million to help settle the CBs issue.
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Sino-Environment exec directors hit back at IDs
They defend sacking of financial controller and refuse to step down
By LYNETTE KHOO
19 November 2009
In what may be the start of a war of words, executive directors (EDs) at Sino-Environment Technology Group have hit back at the company’s independent directors (IDs), hurling accusations against them and its sacked financial controller.
In an SGX filing yesterday, the executive directors stated their grounds for dismissing financial controller Raynauld Liang Wee Leong and accused the IDs of denying them access to crucial findings by the company’s auditors. They also objected to certain professional fees paid.
The executive directors are chairman Sun Jiangrong, whom the EDs say is on official leave of absence, acting CEO You Shengquan, and chief technical officer Li Shouxin.
They claim that Mr. Liang had instructed 21 announcements to be released on SGXnet without the knowledge of the acting CEO and had failed to pay interest for the convertible bonds falling due on July 8, causing an event of default - this despite the group having remitted $5 million from China to its Singapore account for paying the $2.98 million interest.
The executive directors also accused Mr. Liang of making an announcement on July 9 ‘containing a misleading and an untruthful statement’ that the company was unable to make the interest payment due on the CBs on July 8.
Responding to the recent sacking of Mr. Liang, the IDs have said the summary dismissal was illegitimate and unlawful. This in turn drew a rap from SGX, which gave the company a 30-day deadline to resolve governance issues or face delisting.
The latest development followed dramatic twists at Sino-Environment, from a loss of a controlling stake by Mr. Sun, a near-departure of management team, a default on $149 million convertible bonds to ‘questionable cash transactions’ flagged by auditors.
Yesterday, the EDs also voiced their dissent towards the IDs - Goh Chee Wee and Wong Chiang Yin - and said they cannot accede to the IDs’ requests that the executive directors resign at this critical moment for the group.
One grievance they cited was the denial of access to findings by PricewaterhouseCoopers (PwC). In October, PwC raised certain questionable cash transactions in the group, which prompted the IDs to lodge police reports in Singapore, Hong Kong and China.
The EDs explained that the cash reserves are in Xiamen International Bank in China to ensure smooth operation of the subsidiaries in China. They noted their requests for details on PwC’s findings were turned down, which prevented them from addressing any issues or allegations. And since they were not consulted on the appointment of the special audit, they have objected to the special audit fees of $952,874.
According to SGX listing rules, however, the audit committee consisting of IDs can direct the appointment of special auditors.
The executive directors also claimed that they were not kept informed of actions or advice from independent financial advisor nTan Corporate Advisory, which was paid a sum of $3 million to help settle the CBs issue.
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