SGX chides China Sky for ignoring directive
Singapore Exchange (SGX) yesterday rapped China Sky Fibre Chemical and its directors for ignoring SGX’s directive to appoint a special auditor.
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It had told firm to appoint a special auditor immediately
By JAMIE LEE
17 December 2011
Singapore Exchange (SGX) yesterday rapped China Sky Fibre Chemical and its directors for ignoring SGX’s directive to appoint a special auditor.
SGX also told off China Sky for sending a series of demands saying that SGX’s only contact with the firm should be through China Sky’s lawyers.
‘The exchange takes a serious view of the board’s disregard of the directive,’ it said in a regulatory filing.
‘The exchange reiterates that it will continue to communicate directly with any officer of any listed company. The exchange will not allow any issuer to dictate how it regulates listed companies,’ it added.
The reprimand came exactly one month after SGX told China Sky to find a special auditor immediately.
In those 30 days, the S-chip had halted trading of its shares, told SGX that it would seek legal advice on its directive, and then wrote three letters to the exchange that said the company would not comply with the directive, SGX said.
‘The company made a number of unfounded allegations about the exchange, including accusing the exchange of taking ‘an intimate interest in the corporate and strategic management and the day-to-day operations’ of the company,’ SGX added.
SGX maintained that the special audit should be carried out, referring to issues that include the botched land acquisition in Fujian and the interested party transactions between the company and audit committee chairman Lai Seng Kwoon.
China Sky had hired Mr Lai’s firm, SK Lai & C, for accounting-related services from 2008 to 2010.
‘The company made contradictory statements and disclosures which were not substantiated when queried by the exchange,’ SGX said, adding that China Sky should lift the trading suspension of its shares.
‘The continued suspension of trading in the company’s shares is not in the interest of shareholders,’ SGX added.