SINGAPORE - Sunvic Chemical Holdings has appointed Ernst & Young Advisory as its external auditor to investigate corporate guarantees provided for loans amounting to some 222.5 million yuan ($44.3 million).
EY Advisory, engaged on April 2, will be part of a special investigative committee - which also comprises legal advisers - announced by the company in February.
Under the engagement, EY Advisory will report directly and provide regular updates to the company's audit committee during the course of the assessment and investigation, the manufacturer of intermediate chemical products said in a regulatory filing on Monday afternoon.
The board added it would provide further updates to shareholders on developments of the case in due course.
The investigation was requested by the company's independent directors after Sunvic Chemical's subsidiaries, Yixing Yinyan Import & Export Co (Yixing Yinyan) and Jiangsu Jurong Chemical Co (Jiangsu Jurong), received letters of demand in relation to two corporate guarantees.
The corporate guarantees were extended to the borrowers - Jiangsu Donglai Real Estate Development Co (Jiangsu Donglai) and Jiangsu Dahe Lvjian Chemical Co (Jiangsu Dahe).
Yixing Yinyan had extended a corporate guarantee to Jiangsu Donglai, whose creditor is Yixing City Futao Rural Micro Credit Co, while Jiangsu Jurong extended a corporate guarantee to Jiangsu Dahe, whose creditor is Bank of China.
Trading in Sunvic Chemical shares has been suspended since Jan 14 upon the company's request. The counter last traded at 2.2 cents.