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Saturday, 14 November 2009
Sino-Environment given 30 days to tackle governance issues
The Singapore Exchange has given Sino-Environment Technology 30 days to address issues raised by its independent directors (IDs) or face delisting after the IDs hit out at the company’s summary dismissal of its financial controller.
Sino-Environment given 30 days to tackle governance issues
Tough action follows summary dismissal of financial controller
By LYNETTE KHOO 14 November 2009
The Singapore Exchange has given Sino-Environment Technology 30 days to address issues raised by its independent directors (IDs) or face delisting after the IDs hit out at the company’s summary dismissal of its financial controller.
In a letter to the company, SGX has also required the company to report to the exchange after 14 days from the date of the letter, which was Nov 13, on its actions to rectify the issues raised.
This unprecedented move came after the IDs informed the exchange that they have not been consulted on this dismissal and expressed concern over a ‘clear failure of corporate governance within the company’.
Sino-Environment had disclosed on Tuesday that it has summarily dismissed financial controller Raynauld Liang Wee Leong ‘on the grounds of misconduct and breach of duties’.
The IDs challenged this yesterday, saying that ‘at no time have they encountered or been given any evidence of any misconduct or breach of duties on the part of the financial controller, as alleged in the announcements’.
They also stressed that they were not consulted on the summary dismissal, which should have been a matter for decision by the board and that they view the dismissal as unlawful.
The IDs noted that Mr. Liang has carried out his duties in the best interest of the company. With his dismissal, the group will, in effect, be without a CFO.
Last month, it emerged that PwC had identified ‘certain questionable cash transactions and matters’ which may have a significant impact on the financial position of the company.
Mr. Liang, on the instructions of the audit committee, lodged a report with the Commercial Affairs Department and the relevant authorities in China on the findings of the auditors.
The IDs requested on Oct 24 that chairman and CEO Sun Jiangrong resign but he refused. They again wrote to Mr. Sun and the other two executive directors on Nov 5 to step down but they did not.
SGX yesterday expressed concern over the state of affairs at Sino-Environment, citing a breach of listing rule 103, that requires directors of an issuer to act in the interests of shareholders as a whole.
‘In view of the seriousness of the developments in the company, the exchange urges all the directors to take urgent steps to ensure that any remaining assets and operations of the company is safeguarded and act in the interest of shareholders as a whole.’
Securities Investors Association (Singapore) (SIAS) has also weighed in on this issue. The investor watchdog noted that the actions of the executive directors have ‘seriously compromised’ shareholders’ interest and called on the executive directors to step down immediately. It also urged shareholders to organise an EGM to oust the executive directors to ensure that the board is functional again.
‘The position taken by the IDs not only seriously questions the credibility of the executive directors but also their ability to continue in office,’ SIAS said.
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Sino-Environment given 30 days to tackle governance issues
Tough action follows summary dismissal of financial controller
By LYNETTE KHOO
14 November 2009
The Singapore Exchange has given Sino-Environment Technology 30 days to address issues raised by its independent directors (IDs) or face delisting after the IDs hit out at the company’s summary dismissal of its financial controller.
In a letter to the company, SGX has also required the company to report to the exchange after 14 days from the date of the letter, which was Nov 13, on its actions to rectify the issues raised.
This unprecedented move came after the IDs informed the exchange that they have not been consulted on this dismissal and expressed concern over a ‘clear failure of corporate governance within the company’.
Sino-Environment had disclosed on Tuesday that it has summarily dismissed financial controller Raynauld Liang Wee Leong ‘on the grounds of misconduct and breach of duties’.
The IDs challenged this yesterday, saying that ‘at no time have they encountered or been given any evidence of any misconduct or breach of duties on the part of the financial controller, as alleged in the announcements’.
They also stressed that they were not consulted on the summary dismissal, which should have been a matter for decision by the board and that they view the dismissal as unlawful.
The IDs noted that Mr. Liang has carried out his duties in the best interest of the company. With his dismissal, the group will, in effect, be without a CFO.
Last month, it emerged that PwC had identified ‘certain questionable cash transactions and matters’ which may have a significant impact on the financial position of the company.
Mr. Liang, on the instructions of the audit committee, lodged a report with the Commercial Affairs Department and the relevant authorities in China on the findings of the auditors.
The IDs requested on Oct 24 that chairman and CEO Sun Jiangrong resign but he refused. They again wrote to Mr. Sun and the other two executive directors on Nov 5 to step down but they did not.
SGX yesterday expressed concern over the state of affairs at Sino-Environment, citing a breach of listing rule 103, that requires directors of an issuer to act in the interests of shareholders as a whole.
‘In view of the seriousness of the developments in the company, the exchange urges all the directors to take urgent steps to ensure that any remaining assets and operations of the company is safeguarded and act in the interest of shareholders as a whole.’
Securities Investors Association (Singapore) (SIAS) has also weighed in on this issue. The investor watchdog noted that the actions of the executive directors have ‘seriously compromised’ shareholders’ interest and called on the executive directors to step down immediately. It also urged shareholders to organise an EGM to oust the executive directors to ensure that the board is functional again.
‘The position taken by the IDs not only seriously questions the credibility of the executive directors but also their ability to continue in office,’ SIAS said.
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