Report on Long-Suspended Companies 12 May 2016 Singapore Exchange
1. Report on Long-Suspended Companies 1.1. Introduction Singapore Exchange (SGX) is introducing a half-yearly report to update shareholders on companies with prolonged trading suspension. This first edition of the report covers 20 companies and aims to shed greater light on their developments, particularly if they have not made corporate disclosures for some time. In the report, SGX provides information on engagement efforts with the companies, directors, special auditors, judicial managers and/or liquidators. Some of these engagements were long-drawn due to difficulty in establishing contact with, or eliciting a response from, board directors. Where special auditors and/or liquidators were appointed, the professionals faced similar challenges in their investigations to establish the state of affairs of the companies. The engagements were aimed at achieving a share trading resumption proposal, or extracting an exit offer for minority shareholders should a delisting occur. 1.2. Summary of Report Key highlights of today s inaugural report on 20 companies whose shares have been suspended for 12 months or more as at 30 April 2016 1 are: a. 11 companies are exploring trading resumption/ reverse takeover. (Fibrechem, Sino Techfibre, PT Berlian, Sinopipe, Eratat, Fung Choi, Fujian Zhenyun, Swee Hong, JES, Golden Energy, Changjiang Fertilizer) b. 2 companies are pursuing court action against individuals. (Celestial, DMX) c. 1 company was recently placed under judicial management. (Anwell) d. 4 companies are in the delisting process, of which 2 are exploring whether to provide an exit offer. (China Milk, China Hongxing, Sunmart, Lankom) e. The remaining are pending responses to the exchange s queries. (China Paper, China Sun) -End- 1 The report contains companies whose shares have been suspended for 12 months or more as at 30 April 2016. The report excludes secondary listings which are subject to continuing listing obligations of home exchanges. 1
In addition to this report, shareholders should also refer to the individual companies announcements which are found on www.sgx.com/company_announcements. Companies Exploring Trading Resumption / Reverse Takeover Suspension Incorporation 1 25 February 2009 Fibrechem Technologies ( Fibrechem ) Bermuda China Personal Goods Following a special audit in 2009, the company was placed under provisional liquidation in 2012. SGX maintained contact with the provisional liquidators and understood that restructuring options were being explored. When queried by SGX from 2012 to 2016, the provisional liquidators represented that there was no material development that needed to be announced. In March 2016, following the latest query from SGX, the provisional liquidators informed SGX that the company was exploring a reverse takeover. 2 19 April 2011 Sino Techfibre ( Sino Techfibre ) Bermuda China Personal Goods Following concerns raised by the statutory auditors over its accounts in 2011, the company commissioned a special audit which noted no material findings. SGX faced difficulty in establishing contact with the board until 2015, when contact was established with the help of the authorities in China. In April 2016, the company informed SGX that it was exploring a reverse takeover. 3 30 January 2012 PT Berlian Laju Tanker Tbk ( PT Berlian ) Indonesia Indonesia Transport Following a breach of debt covenants from acting as guarantor for its subsidiaries loans, the company began experiencing going concern issues in 2012. SGX maintained contact with the company as it sought to address its financial issues. In January 2016, the company announced to shareholders that it was exploring debt restructuring plans and trading resumption. 1
Companies Exploring Trading Resumption / Reverse Takeover Suspension Incorporation 4 2 April 2012 Sinopipe Holdings ( Sinopipe ) Singapore China Construction & Materials Following audit issues noted by its statutory auditor, the company commissioned a special audit and announced the findings in 2013. The company submitted a trading resumption proposal in 2014. However SGX required the company to first address going concern issues. In March 2016, the company announced to shareholders that it was again exploring a trading resumption. 5 30 January 2014 Eratat Lifestyle ( Eratat ) Singapore China Personal Goods The company was placed under judicial management in 2014. In January 2016, the company announced to shareholders that it was exploring plans to transfer to Catalist through a reverse takeover. 6 15 September 2014 Fung Choi Media Group ( Fung Choi ) Bermuda China Support Services The company was placed under provisional liquidation in 2015. In March 2016, the company announced to shareholders that it had entered into a sale and purchase agreement for the sale of some of its assets. In May 2016, the company informed SGX that it was exploring a trading resumption. 7 26 December 2014 Fujian Zhenyun Plastics Co. Ltd ( Fujian Zhenyun ) China China Construction & Materials A special auditor was appointed to investigate the affairs of the company in 2015. However, the company experienced cash flow difficulties which led to a lack of progress on the special audit. In April 2016, the company announced to shareholders that it was in talks with a potential investor for restructuring and fund raising plans. The company also informed SGX that it was exploring a trading resumption proposal. 2
Companies Exploring Trading Resumption / Reverse Takeover Suspension Incorporation 8 11 February 2015 Swee Hong ( Swee Hong ) Singapore Singapore Construction & Materials The company was placed under a creditors scheme of arrangement as part of a debt restructuring plan in 2015. In April 2016, the company announced to shareholders that the scheme had been approved by the Singapore courts. The company also announced that it was exploring a trading resumption proposal. 9 4 March 2015 JES International Holdings ( JES ) Singapore China Industrial Engineering The company applied to the Chinese courts for approval of a scheme of arrangement as part of its debt restructuring plan in 2015. The application was rejected and the company appealed. In April 2016, the company announced to shareholders that it had signed a term sheet with a potential investor for a reverse takeover. The company informed SGX that it was exploring a trading resumption. 10 17 April 2015 Changjiang Fertilizer Holdings ( Changjiang Fertilizer ) Singapore China Chemicals The company ceased operations and became a cash company in 2015. In April 2016, the company announced a potential reverse takeover. 11 23 April 2015 Golden Energy And Resources ( Golden Energy ) Singapore Indonesia Mining / Quarrying The company completed a reverse takeover in 2015 but was unable to meet the public float requirement. SGX granted the company an extension of time to 30 June 2016 to meet the requirement and resume trading. 3
Companies Pending Court Action Against Individuals suspension incorporation 12 16 June 2009 Celestial Nutrifoods ( Celestial ) Bermuda China Food Producers The company was placed under liquidation in 2010. SGX maintained contact with the liquidators and understood that the liquidators were not announcing any updates as they were still investigating possible irregularities. In March 2016, the provisional liquidators announced on behalf of the company that it had filed an action in the Singapore courts against five individuals: 1. Mr. Ming Dequan 2. Mr. Lai Seng Kwoon 3. Mr. Loo Choon Chiaw 4. Mr. Ming Dexin and 5. Mr. Ken Okubo 13 24 March 2015 DMX Technologies Group ( DMX ) Bermuda China IT Services The company commenced investigations into the accounting practices of its subsidiaries in 2015. In April 2016, the company announced to shareholders that it had commenced legal action in the Hong Kong courts against its former management. 14 14 August 2013 Anwell Technologies ( Anwell ) Recently Placed under Judicial Management Singapore China Machinery & Equipment The company s management is under investigation by the authorities in China for allegations regarding the misuse of municipal monies. The company was placed under judicial management in February 2016. 4
Companies Exploring a Delisting suspension incorporation 15 12 February 2010 China Milk Products Group ( China Milk ) Cayman Islands China Food Producers Following a default of its convertible bonds in 2010, the company was placed under provisional liquidation in 2011. The company was unable to reach a settlement with the convertible bondholders and was placed under official liquidation in 2013. The liquidators investigated the affairs of the company but investigation was hampered by a lack of cooperation from the former management. In the latest update provided to SGX, the investigations undertaken by the liquidators showed that the company was insolvent. The liquidators applied to SGX for the delisting of the company without an exit offer and extraordinary general meeting. SGX had no objection based on the official representations of the liquidators that the company was insolvent and did not have the financial resources to make an exit offer. The company will be removed from the Official List of the exchange on 13 June 2016. 16 28 February 2011 China Hongxing Sports ( China Hongxing ) Bermuda China Personal Goods Following irregularities noted in the accounts of its subsidiaries by its statutory auditor in 2011, the company commissioned a special audit and announced the findings in 2012. SGX allowed the company to resume trading in 2013, subject to regulatory conditions. However, the company announced in 2014 that it lacked the financial resources to meet the conditions to resume trading. The company then announced the appointment of professionals to explore a delisting. In April 2016, the company announced to shareholders that it was looking to 5
Companies Exploring a Delisting suspension incorporation delist and provide an exit offer. 17 10 April 2012 Sunmart Holdings ( Sunmart ) Singapore China General Industrials Following audit issues raised by its statutory auditors, the company commissioned a special audit and announced the findings in 2013. The company submitted two trading resumption proposals but failed to address SGX s concerns on satisfactory resolution of the special audit findings. In April 2016, the company announced to shareholders that it was exploring a voluntary delisting and an exit offer. 18 18 March 2013 Lankom Electronics ( Lankom ) Bermuda Taiwan Electronic Products The company was placed on the watch-list in 2010 and was unable to satisfy the requirements to exit the watch-list within the required cure period. SGX issued a delisting directive to the company and its controlling shareholder to provide an exit offer. However, the company represented to the exchange that it was not in a position to make an exit offer as it was in a net liability position. In April 2016, SGX requested the company to finalize its delisting plans, including an announcement of its financial statements to provide clarity on its financial position and ability, if any, to provide an exit offer. 6
Companies Pending Response to Exchange s Queries suspension incorporation 19 26 March 2009 China Sun Bio- Chem Technology Group Company ( China Sun ) Cayman Islands China Chemicals Following a default on its convertible bonds in 2009, the company was placed under provisional liquidation in 2010. A special audit was commissioned but was not completed. The company was discharged from liquidation in 2011 after reaching a settlement with the convertible bondholders, and its provisional liquidators were appointed as its directors. SGX maintained contact with the directors and understood the company was facing further demands from a creditor. When queried by SGX from 2012 to 2016, the directors represented that there was no material development that needed to be announced. In the latest update provided to SGX, the directors represented that the company had no viable business or financial resources to maintain its listing status. In response, SGX posed the following queries to the company in May 2016: 1. Please explain why the board was unable to complete the investigation into the company s affairs after being discharged as provisional liquidators. 2. Please explain the current financial position of the company. 3. Please provide the board s intention and plans with regards to the listing status of the company. 7
Companies Pending Response to Exchange s Queries suspension incorporation 20 27 January 2014 China Paper Holdings ( China Paper ) Bermuda China Forestry & Paper Following an inspection by the authorities in China, a restriction was placed on the company to prevent it from making outward remittances in 2014. As a result of the restriction, the company was unable to meet financial obligations that fell due. The company has not announced any update on the resolution of the restriction placed. SGX is in contact with the Chinese authorities to obtain an update on the affairs of the company. 8