SINGAPORE - 8Telecom International has been served with an originating summons taken by Top Capital Securities to put the company into judicial management for not paying back a share subscription consideration of about $1.7 million.

The two parties had agreed under the subscription agreement that any dispute with the pact would be referred to and resolved by arbitration in the Singapore International Arbitration Centre. 8Telecom said in its exchange filing that Top Capital had made the application to court without resolving the dispute via arbitration, and that it had appointed legal counsel to defend the application.

The Singapore Exchange had on Feb 10, 2019, rejected 8Telecom's applications to issue new shares for various purposes, including payment to vendors for its acquisition of a 51 per cent stake in China Commodity Market and China Commodity Centre.

The company had agreed on June 25, 2018, to issue 16.88 million new ordinary shares to Top Capital at $0.103 per share as part of a subscription agreement with Top Capital and Tai Yang Technology. Top Capital was introduced to 8Telecom by business associates of 8Telecom executive director Wang Zhejun.

It wanted to take up shares in 8Telecom for investment purposes, and would have owned 12.51 per cent of 8Telecom post-allotment exercise.

Tai Yang's agreement was for 5.6 million new ordinary shares at an aggregate consideration of $576,800. It was terminated with mutual consent on Oct 15, 2018. Instead, Tai Yang agreed to provide the sum equivalent to the subscription consideration as a loan to 8Telecom, for a period of three months from the date of the termination agreement, at zero interest rate.