SINGAPORE - The board of mainboard-listed Oriental Group has uncovered unauthorised deals by its chairman and executive director.
Oriental chairman Wu Dingrong and his son-in-law, Mr Sun Lu, who is an executive director, are alleged to have made unauthorised guarantees at two subsidiaries in China without the approval of the board and other directors: Mr Lee Wan Sing, Mr Ong Wee Chuan, Mr Chua Hung Meng, Mr Tan Song Kwang and Mr Koh Choon Kong.
As a result, the board has set up an independent review committee to investigate the matter.
Meanwhile, Mr Wu and Mr Sun have taken an immediate leave of absence and have been stripped of all authority at the company.
They have also undertaken to fully cooperate with the company on all matters relating to the guarantees.
Oriental, meanwhile, has obtained a fixed first charge over the 68 million shares of the company held by Dingji Investments.
The shares of Dingji Investments are being held by Mr Sun and Ms Miao Lina, Mr Wu's daughter, on trust for Mr Wu.
Oriental has, in addition, obtained a personal guarantee from Mr Wu in favour of the company, indemnifying the company for any and all losses that the group may suffer as a result of the guarantees and related legal proceedings.
Oriental produces and sells steel bars and billets in China as well as trade steel products overseas, mainly in Southeast Asia.