Chinese firm suspends share trading

China Fibretech tells SGX three customers made claims for damages against subsidiary

China Fibretech suspended the trading of its shares yesterday after three customers lodged damages claims against a subsidiary last week.

The firm had halted trading last Wednesday pending an announcement. Yesterday, it told the Singapore Exchange that Shishi Simwa Knitting & Dyeing Co received the claims on Nov 25 and 26.

China Fibretech, which is based in Shishi city in Fujian province, provides dyeing and post-processing treatment services for fabrics.

The three customers allege that "they have suffered substantial damages and financial losses" as a result of the subsidiary's products "not meeting the specified requirements, resulting in de-colouring in their end-products".

China Fibretech said the claims were for goods delivered in 2014 and early 2015. The alleged losses were not quantified in the claims.

China Fibretech executive chairman and chief executive Wu Xinhua said in a statement: "The management will be visiting the customers to establish the facts surrounding their allegations."

Mr Wu said there is still "great uncertainty in relation to the validity of these claims, the quantum thereof and the impact that these might have on the company".

He said management will not admit liability or agree to any compensation without board approval.

China Fibretech, which listed on the mainboard in 2008, said its stock will be suspended until further notice. Its shares closed two cents up at $1.02 last Wednesday before trading was halted.

A version of this article appeared in the print edition of The Straits Times on December 01, 2015, with the headline 'Chinese firm suspends share trading'. Print Edition | Subscribe