S-chip China Sky may soon resume trading after 4 years in wilderness

SINGAPORE - Shares of troubled S-chip China Sky Chemical Fibre can resume trading once the company fulfills certain conditions, the local bourse said on Thursday.

This could bring an end to a trading suspension that has lasted nearly four years.

The Singapore Exchange's statement followed a settlement between the Monetary Authority of Singapore (MAS) and China Sky's former chief executive, Mr Huang Zhong Xuan.

Mr Huang has agreed, as part of the settlement, to surrender about 10 per cent of his China Sky stake, or about 15.4 million shares.

SGX said that for trading to resume, China Sky's board will have to accept Mr Huang's stake surrender offer.

The company's board must also undertake to appoint a "suitable" chief financial officer within six months after trading resumes as well as a compliance advisor, SGX said.

The exchange also said that China Sky needs to demonstrate that its internal controls are in place, and get professional accountants to conduct annual audits on its internal controls for at least three years.

Trading in China Sky was suspended on Nov 17, 2011, a day after the bourse told the firm to appoint a special auditor to look into some questionable transactions.

The exchange had been concerned over events surrounding a planned land acquisition in Fujian province that was later cancelled. It also wanted a probe into deals the company conducted with one of its independent directors.

China Sky defied the bourse's order, which prompted the SGX to go to the High Court to force it to comply.

The special auditor's report, which finally came out on June 20, 2013, pointed to disclosure breaches and internal control weaknesses.