SINGAPORE - The Singapore Exchange is awaiting the findings of an investigation into customer claims against China Fibretech and the company's bank balance, and the latter's shares will remain suspended "pending clarity" on its financial position.
SGX's head of listing compliance, Ms June Sim, made this statement on Sunday (April 10) after China Fibretech said on Friday that it had met up with the customers in December, and agreed to conduct an investigation into the claims.
The three customers had complained that they suffered "substantial damages and financial losses" as a result of defective products delivered to them by China Fibretech unit Shishi Simwa Knitting & Dyeing Co.
China Fibretech said in its statement on Friday that up until now, the customers have not indicated the amount of their losses, have not quantified their claims either in volume or value, and no physical or documentary evidence have been provided.
Ms Sim said in her statement that since November last year, China Fibretech has taken steps, as required by SGX and set out in a Regulator's Column warning investors about companies based in China including those from the textile and sporting goods business, that were announcing adverse and significant changes in their financial positions.
In the column, SGX said these changes included customer claims which sometimes involved large compensations, and where bank balances were duly affected.
"As SGX mentioned in the Column, board directors of such companies are required to uphold their fiduciary duty to shareholders to safeguard the interest and assets of the company including undertaking the appropriate steps or due diligence to verify the amount of damages claimed," Ms Sim wrote.
"The company's Audit Committee should also take a particular and active interest in the matter and view the safeguarding of the company's assets as its top priority. Auditors are expected to undertake audit procedures to the standards expected of listed companies."