Shares in Singapore-listed China Essence handed to Chinese local government after near riot over farmer debts

SINGAPORE - Shares in Singapore-listed China Essence Group were transferred to a Chinese local government authority which had stepped in to pay debts owed by the firms' subsidiaries to local farmers after riots almost broke out.

Details of the incident were disclosed by China Essence in a filing with the Singapore Exchange on Monday (Sept 7).

The statement did not disclose the location of the unrest or the name of the subsdiaries involved in the incident.

China Essence said company checks by accountancy firm Moore Stephens had uncovered changes in shareholdings at the subsidiaries which had not been disclosed to the SGX.

The company learnt from its former executive chairman and chief executive Zhao Libin that he had overseen the change in shareholdings.

The statement said that Mr Zhou had indicated that "as a result of longstanding debts to the farmers by the subsidiaries, the farmers had almost run riot at the factory".

"The local government had to step in to quell the riot by settling the debts on behalf of the subsidiaries. In return, the two subsidiaries had to transfer the shares to the local government (to be) held in trust."