Monday, 27 November 2017

China Stationary, unable to contact the 2 remaining directors

Today China Stationary announced the suspension of its shares.

It also announced:

 ..... that the Company is unable to release its Third Quarter Results by 30 November 2017 (“Timeframe”) to Bursa Securities as required under Paragraph 9.22(1) of the MMLR.

The failure to issue the above Third Quarter Results is due to the following reasons:

1. unable to obtain confirmations from third parties (i.e. bankers, debtors, creditors, courts in China etc) to perform verification checks in relation to all litigation cases involving the subsidiaries of CSL;

2. unable to contact the two remaining directors i.e. Mr Chan Fung @ Kwan Wing Yin and Mr Angus Kwan Chun Jut. Hence, no Board of Directors' meeting is held to approve the Third Quarter Results; and

3. unable to undertake the necessary assessment on the impact to the CSL’s financial statements and its operations without the issuance of legal opinion report by Zhi Jun Law Firm of Fujian.

What a joke!

Except of course if you are an investor in this company, in which case you probably have not read this blog.

To rub further salt in the wound, the company accounts were approved until the very end, year 2016:

And according to these numbers the company still had more than RMB 1.8 Billion (!) cash.

That is, if one would actually believe these numbers, the auditor (RT LLP from Singapore)  apparently did so, I don't.

Bursa did indeed issue a directive, which included:

(b)     Verification of CSL’s existing cash and bank balances ....

Unfortunately, much too late, they should have done this many years ago. This company had so many red flags that I lost count.

I hope that Bursa and SC learn from this case and will issue the same directive to all China listed companies. The bad apples will fail, while the good ones (if any) will gain from this exercise.

Will there be any justice in this case? I hope so, but it might be rather difficult, the company is listed in Malaysia, incorporated in Bermuda, has operations and assets in China and its auditors are Singaporean. Good luck with that!

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