China Gaoxian resumes trading under new investors and management

Scandal-hit China Gaoxian Fibre Fabric Holdings on Wednesday got a fresh start under new investors and management, as its shares resumed trading after a suspension of two and a half years.

But shares in the China-based yarn and fabric maker closed at 8.6 cents, a slump of 10.4 cents or 54.7 per cent from its last traded price on March 21, 2011.

The company had plunged into an accounting scandal after its auditors, Ernst & Young, could neither verify the bank balances in the company's subsidiaries for the financial year ended Dec 31, 2010.

PwC was then appointed as special auditors by China Gaoxian's audit committee on April 20, 2011 to conduct a review into the financial affairs.

China Gaoxian has also had to deal with rising losses. It lost 59.78 million yuan for the six months to June 30, up from 18.1 million yuan a year ago.

But a white knight has stepped in to help China Gaoxian, which is one of a number of Singapore-listed China firms that have fallen into accounting scandals in recent years.

On Wednesday, the first tranche of the investment in China Gaoxian by Fleur Capital (S) was completed.

The firm also announced a new chief executive officer, chief financial officer and chairman.