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Monday, 25 January 2010
Independent directors start legal proceedings
In the latest twist in the Sino-Environment saga, the company’s independent directors, Mr. Goh Chee Wee and Mr. Wong Chiang Yin, have started legal proceedings in a bid to oust the executive directors from the company’s board.
They seek court order to hold EGM in bid to oust firm’s executive directors
By Esther Teo 09 December 2009
In the latest twist in the Sino-Environment saga, the company’s independent directors, Mr. Goh Chee Wee and Mr. Wong Chiang Yin, have started legal proceedings in a bid to oust the executive directors from the company’s board.
The two yesterday filed an application to the Supreme Court that seeks an order allowing for an extraordinary general meeting (EGM) to remove chairman Sun Jiangrong - said by the executive directors to be on official leave of absence - acting chief executive You Shengquan and chief technical officer Li Shouxin.
At the EGM, the independent directors also want to appoint at least two additional directors to the board and to remove the executive directors from being authorised signatories of the company’s bank accounts in Singapore and China.
In their place, they intend to appoint themselves, or parties they nominate, as authorised signatories of the accounts. Their legal move is being made under Section 182 of the Companies Act (Chapter 50).
Usually, it is the shareholders who call an EGM to remove directors, but Section 182 states that if it is impracticable to call one, the court can order one to be called, held and conducted in a manner that it thinks fit.
The EGM has to be called within 14 days of a court order being granted.
In an announcement to shareholders yesterday, the independent directors said they also want the court to stop the executive directors from disposing of any assets belonging to the company or its subsidiaries worth 500,000 yuan ($102,000) or more without prior written approval of the audit committee.
The executive directors must also furnish a written report to the audit committee for each disbursement of 100,000 yuan or more, and will not be able to enter or negotiate new agreements exceeding 5 million yuan without first obtaining written approval.
In addition, the executive directors are to be prevented from curtailing the mandate of the auditors currently reviewing and investigating the situation at the company.
The independent directors also want the executive directors to take steps to protect the assets of the company as requested by them. These include putting in place any change required to the board of directors or the authorised signatories of bank accounts.
Sino-Environment did not say if these orders had already been granted by the court.
The new initiative by the independent directors heightens investor concern about the company, which was the subject of a special PricewaterhouseCoopers (PwC) audit that was published last Friday.
It found that about $85 million worth of transactions were made without board approval and authorisation.
No raw material or equipment was delivered despite purchase agreements, and no significant work was done at the projects that the group purportedly invested in.
The report said the company’s chairman and chief executive refused to provide authorisation letters for PwC to obtain statements directly and independently from banks, and that PwC officers were even forced off the premises of one bank.
When contacted, a Singapore Exchange spokesman said the exchange supported the safeguarding of investors’ interests.
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Independent directors start legal proceedings
They seek court order to hold EGM in bid to oust firm’s executive directors
By Esther Teo
09 December 2009
In the latest twist in the Sino-Environment saga, the company’s independent directors, Mr. Goh Chee Wee and Mr. Wong Chiang Yin, have started legal proceedings in a bid to oust the executive directors from the company’s board.
The two yesterday filed an application to the Supreme Court that seeks an order allowing for an extraordinary general meeting (EGM) to remove chairman Sun Jiangrong - said by the executive directors to be on official leave of absence - acting chief executive You Shengquan and chief technical officer Li Shouxin.
At the EGM, the independent directors also want to appoint at least two additional directors to the board and to remove the executive directors from being authorised signatories of the company’s bank accounts in Singapore and China.
In their place, they intend to appoint themselves, or parties they nominate, as authorised signatories of the accounts. Their legal move is being made under Section 182 of the Companies Act (Chapter 50).
Usually, it is the shareholders who call an EGM to remove directors, but Section 182 states that if it is impracticable to call one, the court can order one to be called, held and conducted in a manner that it thinks fit.
The EGM has to be called within 14 days of a court order being granted.
In an announcement to shareholders yesterday, the independent directors said they also want the court to stop the executive directors from disposing of any assets belonging to the company or its subsidiaries worth 500,000 yuan ($102,000) or more without prior written approval of the audit committee.
The executive directors must also furnish a written report to the audit committee for each disbursement of 100,000 yuan or more, and will not be able to enter or negotiate new agreements exceeding 5 million yuan without first obtaining written approval.
In addition, the executive directors are to be prevented from curtailing the mandate of the auditors currently reviewing and investigating the situation at the company.
The independent directors also want the executive directors to take steps to protect the assets of the company as requested by them. These include putting in place any change required to the board of directors or the authorised signatories of bank accounts.
Sino-Environment did not say if these orders had already been granted by the court.
The new initiative by the independent directors heightens investor concern about the company, which was the subject of a special PricewaterhouseCoopers (PwC) audit that was published last Friday.
It found that about $85 million worth of transactions were made without board approval and authorisation.
No raw material or equipment was delivered despite purchase agreements, and no significant work was done at the projects that the group purportedly invested in.
The report said the company’s chairman and chief executive refused to provide authorisation letters for PwC to obtain statements directly and independently from banks, and that PwC officers were even forced off the premises of one bank.
When contacted, a Singapore Exchange spokesman said the exchange supported the safeguarding of investors’ interests.
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