SINGAPORE - China Taisan Technology Group Holdings has received an extension of time from the Singapore Exchange (SGX), to appoint an independent special auditor and a second suitable independent director resident in Singapore by July 13.
The SGX had issued a notice of compliance to the troubled fabric maker on June 8, instructing the group to do so by June 30.
But subsequent to the notice, the group's sole operating subsidiary in China failed to provide material financial information requested by the board and its auditors, and also refused to transfer funds to meet the group's liabilities.
"Given that as at the date of this announcement, the company has no certainty of its sources and sufficiency of funding and taking into account its difficulties in securing fresh funds, this has raised serious concerns as to the ability of the company to remain as a going concern, and the board is currently seeking legal advice as to the appropriate steps it should take moving forward," China Taisan said.
"As a result of the above recent developments and given the financial circumstances of the company, the board is also considering the best means by which the special audit may be carried out. Further, the board has to date been unsuccessful in its efforts to appoint a suitable individual to act as an independent director."
The SGX wants a cash audit of the company by a special auditor going as far back as 2014. This should include a review of the circumstances surrounding the acquisition and payment of PPE (property, plant and equipment) expenditure of 160 million yuan (S$33.3 million), including the valuation report signed off by Fujian Mincai Certified Public Accountants on April 18.
Shares of China Taisan have been suspended from trading since June 4.