SINGAPORE - Foreland Fabrictech Holdings' application to extend the submission deadline for a proposal to resume trading has been rejected by the Singapore Exchange (SGX).
Shares of the Chinese textile maker were suspended on Dec 27, 2016. According to SGX's listing rules, the firm had to submit a proposal with a view to resume trading within 12 months of this suspension date.
The company said in a filing to the Singapore Exchange on Tuesday (Jan 23) that it had submitted an application to extend this deadline to Dec 31, 2018, to complete its fundraising exercise and to take legal measures against former executive chairman Tsoi Kin Chit, and the firm's unit Fulian Knitting Co, following which the firm believed it would be in a better position to submit resumption proposals to the Singapore bourse.
However, Foreland said that it had on Jan 16 received a letter from the SGX rejecting its application citing that the firm's plan to deal with Mr Tsoi and Fulian has been "inadequate", with no updates from the company on this issue since Dec 27, 2016, despite repeated requests.
The uncertain state of affairs of Foreland is further exacerbated by its decision not to conduct a special audit on Fulian, which will deprive the market of any concerns and findings which may arise in the special audit report; and prevent any rectifications which may be taken following the report, SGX said.
Moreover, there has been no progress on the company's fundraising efforts to obtain investor funding though it claimed to have discussions, SGX added. As such, the Singapore bourse said it found no extenuating reasons to grant the extension of time sought by the company.
In its letter to Foreland, SGX also mentioned that if Foreland is unable to provide a comprehensive resumption proposal, it would like the firm to "make the necessary arrangements for the delisting of the company by way of a cash exit offer".
The company said it is currently in the midst of discussions with its legal advisers to provide a comprehensive resumption proposal to the SGX.
Back in Dec 8, 2016, Foreland had lodged a complaint with the Commercial Affairs Department against Mr Tsoi after a public reprimand from the SGX, centred on 290 million yuan (S$60.4 million) paid as compensation by Fulian to a customer, Jiangxi Longdu.
Among other things, SGX reprimanded Mr Tsoi and Foreland's former executive director, Zhang Hong Lai, for their failure in carrying their fiduciary duties, causing the company to breach its obligations under the listing rules. SGX also said that Mr Tsoi, Mr Zhang and former non-executive director, Chen Chao Ying, failed to act in the interests of shareholders as a whole.