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Saturday, 20 March 2010
Management of Sino-Environment’s China units seek 20% stake
In the latest twist at Sino-Environment, the key management of its subsidiaries in China have pledged their support to help restart business operations.
Management of Sino-Environment’s China units seek 20% stake
By LYNETTE KHOO 18 March 2010
In the latest twist at Sino-Environment, the key management of its subsidiaries in China have pledged their support to help restart business operations.
In return, they are asking for the opportunity to subscribe for 20 per cent or more of the group’s issued paid-up capital in the form of new shares.
Sino-Environment said group CEO Sam Chong Keen, chairman and independent director In Nany Sing Charlie and audit committee chairman Wong Sek Choon visited the group’s plant in Fuzhou from March 8 to 9.
During the two-day visit, key management led by deputy general manager Tian Yuan pledged its support and made the request for share subscription. It also submitted a formal written request dated March 9 to the board, signed by Mr. Tian and the inspector and the chairman of the union, Pan Chengtu.
‘I think this is a very positive development because the management is prepared to cough up their hard-earned cash and buy shares in the company, particularly so now the shares are suspended,’ Mr. Sam told BT yesterday. ‘I believe this will really tie their interest intimately with the company.’
Mr. Sam said he hasn’t obtained a list of names the key management represents. But should the company undertake a direct share placement, the identities of the new shareholders will be disclosed in compliance with regulatory requirements. Shareholders’ approval will also have to be sought.
But Sino-Environment’s annual reports published since its 2006 listing made no mention of Mr. Tian or Mr. Pan. BT understands that Mr. Tian is the legal representative of Thumb Environment, a subsidiary of Sino-Environment. Most of the group’s staff in China have resigned and operations there have ceased.
Asked if Mr. Tian could be the proxy of former chairman and CEO Sun Jiangrong, Mr. Sam said: ‘How do I ensure? But they send me an appeal letter, I take it at face value. Anybody can speculate.’
Mr. Sun had lost his entire majority stake last year, which he had pledged as collateral for a personal loan. When he defaulted on the loan, the stake was forced-sold by the creditor, triggering a default for the group’s $149 million of convertible bonds. PricewaterhouseCoopers later found that substantial transactions by the group were carried out without board approval or authorisation.
Mr. Sam said Mr. Sun is no longer the legal representative for some of the group’s subsidiaries and ‘we are checking out all the facts now’.
‘There are certain administrative steps,’ he said. ‘We are still discussing with the lawyers to see how this can be done. We first have to find a legal rep obviously to sign the papers.’
He said he plans to appoint representatives to the boards of active subsidiaries to have majority control over the boards.
Mr. Sam, however, declined to comment on the $14 million cash reserves the group’s former executive directors claimed to have kept in a Xiamen bank, saying: ‘We haven’t sent the auditors in yet, so I don’t want to make any comments on the cash as that could be quite misleading.’
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Management of Sino-Environment’s China units seek 20% stake
By LYNETTE KHOO
18 March 2010
In the latest twist at Sino-Environment, the key management of its subsidiaries in China have pledged their support to help restart business operations.
In return, they are asking for the opportunity to subscribe for 20 per cent or more of the group’s issued paid-up capital in the form of new shares.
Sino-Environment said group CEO Sam Chong Keen, chairman and independent director In Nany Sing Charlie and audit committee chairman Wong Sek Choon visited the group’s plant in Fuzhou from March 8 to 9.
During the two-day visit, key management led by deputy general manager Tian Yuan pledged its support and made the request for share subscription. It also submitted a formal written request dated March 9 to the board, signed by Mr. Tian and the inspector and the chairman of the union, Pan Chengtu.
‘I think this is a very positive development because the management is prepared to cough up their hard-earned cash and buy shares in the company, particularly so now the shares are suspended,’ Mr. Sam told BT yesterday. ‘I believe this will really tie their interest intimately with the company.’
Mr. Sam said he hasn’t obtained a list of names the key management represents. But should the company undertake a direct share placement, the identities of the new shareholders will be disclosed in compliance with regulatory requirements. Shareholders’ approval will also have to be sought.
But Sino-Environment’s annual reports published since its 2006 listing made no mention of Mr. Tian or Mr. Pan. BT understands that Mr. Tian is the legal representative of Thumb Environment, a subsidiary of Sino-Environment. Most of the group’s staff in China have resigned and operations there have ceased.
Asked if Mr. Tian could be the proxy of former chairman and CEO Sun Jiangrong, Mr. Sam said: ‘How do I ensure? But they send me an appeal letter, I take it at face value. Anybody can speculate.’
Mr. Sun had lost his entire majority stake last year, which he had pledged as collateral for a personal loan. When he defaulted on the loan, the stake was forced-sold by the creditor, triggering a default for the group’s $149 million of convertible bonds. PricewaterhouseCoopers later found that substantial transactions by the group were carried out without board approval or authorisation.
Mr. Sam said Mr. Sun is no longer the legal representative for some of the group’s subsidiaries and ‘we are checking out all the facts now’.
‘There are certain administrative steps,’ he said. ‘We are still discussing with the lawyers to see how this can be done. We first have to find a legal rep obviously to sign the papers.’
He said he plans to appoint representatives to the boards of active subsidiaries to have majority control over the boards.
Mr. Sam, however, declined to comment on the $14 million cash reserves the group’s former executive directors claimed to have kept in a Xiamen bank, saying: ‘We haven’t sent the auditors in yet, so I don’t want to make any comments on the cash as that could be quite misleading.’
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