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Friday 11 December 2009
Court freezes big asset sales by Sino-Env EDs
Independent Directors (IDs) of Sino-Environment Technology Group were granted court orders yesterday to restrain the company’s executive directors (EDs) from selling any major assets and signing new contracts of significant value.
They’re also stopped from blocking probes by auditors
By JAMIE LEE 11 December 2009
(SINGAPORE) Independent Directors (IDs) of Sino-Environment Technology Group were granted court orders yesterday to restrain the company’s executive directors (EDs) from selling any major assets and signing new contracts of significant value.
Some other orders that the IDs are seeking - including one to stop the EDs from authorising bank transactions - will be reviewed by the High Court on Tuesday next week.
Justice Tay Yong Kwang granted orders that stop the EDs from freely selling any company asset worth more than 500,000 yuan and negotiating any contract exceeding five million yuan without the IDs’ approval.
In addition, the EDs - chairman Sun Jiangrong and directors You Shengquan and Li Shouxin - cannot block any investigation by auditors.
As part of the remaining order applications to be reviewed next week, the IDs - Goh Chee Wee and Wong Chiang Yin - want to remove the EDs from the board at an extraordinary general meeting (EGM) and replace them with at least two new directors within 14 days from the EGM.
The IDs also want to replace the EDs and their nominees as authorised signatories of Sino-Environment’s bank accounts here and in China.
And the IDs want to be informed if the EDs disburse any amount of more than 100,000 yuan.
Lawyers told BT that the EDs would be in contempt of the Singapore court should they disobey the court orders but would be punished only if they enter Singapore.
ID Mr. Wong said he is satisfied with the outcome of events so far. ‘The most important thing is to stop them from disappearing with all the assets,’ he told BT.
The IDs’ legal action follows a damning report released by PricewaterhouseCoopers (PwC) last week that uncovered $85 million of transactions at Sino-Environment that were made without board approval.
PwC also spotted a payment of 920 million yen for raw materials to a Japanese firm that has denied signing a contract or getting the money.
PwC also said it had been blocked from directly obtaining statements from some of Sino-Environment’s banks.
Trouble at the company surfaced early this year when Mr. Sun lost his controlling stake after defaulting on a personal loan. He had pledged the shares as debt collateral.
Tension between the IDs and the EDs escalated when the company’s financial controller - who filed a police report based on the PwC audit - was fired in November on claims of misconduct.
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Court freezes big asset sales by Sino-Env EDs
They’re also stopped from blocking probes by auditors
By JAMIE LEE
11 December 2009
(SINGAPORE) Independent Directors (IDs) of Sino-Environment Technology Group were granted court orders yesterday to restrain the company’s executive directors (EDs) from selling any major assets and signing new contracts of significant value.
Some other orders that the IDs are seeking - including one to stop the EDs from authorising bank transactions - will be reviewed by the High Court on Tuesday next week.
Justice Tay Yong Kwang granted orders that stop the EDs from freely selling any company asset worth more than 500,000 yuan and negotiating any contract exceeding five million yuan without the IDs’ approval.
In addition, the EDs - chairman Sun Jiangrong and directors You Shengquan and Li Shouxin - cannot block any investigation by auditors.
As part of the remaining order applications to be reviewed next week, the IDs - Goh Chee Wee and Wong Chiang Yin - want to remove the EDs from the board at an extraordinary general meeting (EGM) and replace them with at least two new directors within 14 days from the EGM.
The IDs also want to replace the EDs and their nominees as authorised signatories of Sino-Environment’s bank accounts here and in China.
And the IDs want to be informed if the EDs disburse any amount of more than 100,000 yuan.
Lawyers told BT that the EDs would be in contempt of the Singapore court should they disobey the court orders but would be punished only if they enter Singapore.
ID Mr. Wong said he is satisfied with the outcome of events so far. ‘The most important thing is to stop them from disappearing with all the assets,’ he told BT.
The IDs’ legal action follows a damning report released by PricewaterhouseCoopers (PwC) last week that uncovered $85 million of transactions at Sino-Environment that were made without board approval.
PwC also spotted a payment of 920 million yen for raw materials to a Japanese firm that has denied signing a contract or getting the money.
PwC also said it had been blocked from directly obtaining statements from some of Sino-Environment’s banks.
Trouble at the company surfaced early this year when Mr. Sun lost his controlling stake after defaulting on a personal loan. He had pledged the shares as debt collateral.
Tension between the IDs and the EDs escalated when the company’s financial controller - who filed a police report based on the PwC audit - was fired in November on claims of misconduct.
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