More trouble for China Essence

On Sept 7, the day trading in China Essence Group shares was suspended, the SGX posed a long list of queries seeking the company's clarifications on unauthorised stock transfers to a Chinese local government authority by former executive chairman and
On Sept 7, the day trading in China Essence Group shares was suspended, the SGX posed a long list of queries seeking the company's clarifications on unauthorised stock transfers to a Chinese local government authority by former executive chairman and chief executive Zhao Libin. PHOTO: BLOOMBERG

Two of four remaining directors quit embattled mainboard-listed company

Embattled China Essence Group has hit more trouble with two of its four remaining directors calling it quits "to pursue other business interests".

Executive director Lee Sai On was appointed barely two months ago when the potato processor overhauled its board with the resignations of three directors and Mr Zhao Libin, who was the executive chairman and chief executive.

Mr Lee, 34, was responsible for the "day-to-day running and corporate development of the group" before his resignation on Wednesday, said China Essence in a Singapore Exchange (SGX) filing on Thursday.

Independent director Raymond Chin Kwan Lam, 53, chairman of the audit committee and a member of the remuneration and nominating committees of the two-month old board, resigned the same day.

Trading in China Essence Group shares has been suspended since Sept 7 after the firm disclosed unauthorised stock transfers to a Chinese local government authority.

The resignations came after chief financial officer and company secretary Yap Kong Wai quit on Sept 9. Executive director Chow Stephen Yoenbon, who was responsible for corporate development as well as mergers and acquisition of the group, quit two days before that.

Mr Chow was also appointed in August.

The firm had already been hit by a spate of resignations by an independent director, company secretary and its auditors in June and July.

Trading in China Essence Group shares has been suspended since Sept 7 after the firm disclosed unauthorised stock transfers to a Chinese local government authority.

The same day, the SGX posed a long list of queries seeking the company's clarifications on this unauthorised transaction by former executive chairman and chief executive Mr Zhao.

The SGX asked for the identities and background of the new shareholders, the reasons Mr Zhao did not inform the board of directors of the transactions, and if chief financial officer Mr Yap knew of the transfers.

According to the company, the share transfers stemmed from a protest by farmers who complained about money owed to them by two China Essence Group subsidiaries.

The SGX also told the company to disclose the amount owed, for how long the debt was owed, how the debts were settled and if all the liabilities had been fully repaid.

The company has yet to provide any answers to the SGX nearly a month after being queried.

On Sept 18, it made a holding announcement saying it is "still in the process of seeking details of the transactions from the former management in order to respond to the queries by the SGX".

The mainboard-listed company, which is incorporated in the Cayman Islands, has been on the SGX watch list of financially embattled firms since June last year. The company posted a loss of 25.37 million yuan (S$5.68 million) for the three months ended June 30.

A version of this article appeared in the print edition of The Straits Times on October 03, 2015, with the headline 'More trouble for China Essence'. Print Edition | Subscribe