China Sky to resume trade today after 4-year suspension

China Sky Chemical Fibre is poised to resume trading today, almost four years after it was suspended as the Monetary Authority of Singapore investigated the company over suspected regulatory breaches by former CEO Huang Zhong Xuan.
China Sky Chemical Fibre is poised to resume trading today, almost four years after it was suspended as the Monetary Authority of Singapore investigated the company over suspected regulatory breaches by former CEO Huang Zhong Xuan.PHOTO: ST FILE

Textile producer in probe back after ensuring financials are in order: CEO

China Sky Chemical Fibre will resume share trading today, ending a four-year suspension that came after a scandal around its former chief executive landed the company in regulatory troubles.

The China-based, mainboard-listed nylon and textile producer has had to spend four years poring over its accounts.

It has had to ensure the financials and compliance standards are in order, but at long last, the firm is ready to return to the stock market, chief executive Ling Yew Kong said.

"In order to get ourselves out of the suspension, we conducted in 2012 a special audit to clarify on the issues particularly surrounding the Fujian land. After the audit was done in 2013, we went back to look at the accounts between 2012 and 2013. In all, the review process took us four years and around $1.8 million," he told The Straits Times yesterday.

The Fujian land was at the centre of the scandal around China Sky former chief Huang Zhong Xuan, who admitted to making misleading statements on the firm's planned land acquisition in Fujian. This led to its trading suspension as regulators looked into the matter.

Mr Huang agreed with the Monetary Authority of Singapore (MAS) in February to settle the issue with a civil penalty of $2.5 million.

Mr Ling, appointed chief executive in 2012, said China Sky has hired Colin Ng & Partners as compliance adviser, one of the MAS pre-conditions to a trading resumption. The firm is still seeking to hire a chief financial officer.

"The suspension has caused some loss of confidence among our business partners, but fortunately our business operations were not greatly affected," he said.

"I don't think there's a confidence crisis among our investors too - our major shareholders, such as Hong Leong Bank, are still with us."

Mr David Gerald, chief executive of Securities Investors Association Singapore, welcomed the news.

"This whole episode was quite unnecessary, putting the shareholders at great disadvantage. But I am very pleased at the efforts of the current CEO and board members to work with the regulators and Sias to put the company back on the right track. I understand that all compliance issues have been satisfactorily ironed out.

"Hopefully, the same incident will not happen again, and let this be a message to listed companies: If you challenge the regulations, you will face the consequence."

A version of this article appeared in the print edition of The Straits Times on September 10, 2015, with the headline 'China Sky to resume trade today after 4-year suspension'. Print Edition | Subscribe