Friday 6 January 2012, 7:44 SGT
By Eveline Danubrata
SINGAPORE, Jan 6 (Reuters) - Textile manufacturer China Sky Chemical Fibre has failed to meet a deadline set by Singapore Exchange (SGX) to appoint a special auditor, in a rare display of defiance by a listed company in the city-state.
The SGX directed China Sky in November last year to appoint a special auditor to investigate transactions between the company and its audit committee chairman as well as a failed land acquisition in China, among other issues.
But China Sky said such a move was unwarranted and not in the best interests of the company and its shareholders. The company also released a string of responses to SGX's reprimand, including email exchanges with the bourse.
The SGX then gave China Sky a final deadline Thursday, Jan 5, with the backing of the Monetary Authority of Singapore.
China Sky failed to meet the deadline and instead announced late on Thursday that three independent directors had stepped down with immediate effect due to the non-compliance with SGX's directive.
"I think this is the first time when a company is so belligerent in Singapore," said Kenneth Ng, head of CIMB Research in Singapore said on Thursday before the expiry of SGX's deadline. "An exchange has to be there to protect the interest of minority shareholders."
The Singapore bourse has stepped up its scrutiny of the accounting practices of Singapore-listed Chinese companies, known in the city-state as S-chips, after two waves of accounting problems last year and in 2008, analysts said.
"We do notice that the SGX is more proactive, especially after the recent accounting scandals," said Eric Ong, an analyst at Singapore brokerage Kim Eng.
"The SGX has requested for more information after the S-chips released their quarterly results. They also asked the companies to be more transparent."
When asked if the SGX has increased the number of queries on companies' earnings, a spokeswoman said that the bourse issues such queries in discharging its role as "a frontline regulator of listed companies."
"A query by the exchange aims to extract greater disclosure from listed companies where trends and figures may not have been explained in a manner which would allow investors to make informed decisions," the spokeswoman said.
For serious breaches of its rules, SGX will put the case before a disciplinary committee who may reprimand, fine, suspend and/or expel the member, according to its website.
Among the latest examples of accounting irregularities at S-chips, an independent investigation by NTan Corporate Advisory released last December found a total of HK$777 million ($99.9 million) in cash that had been unaccounted for at FibreChem Technologies.
Earlier this week, Sino Techfibre, which makes synthetic leather products, said it had appointed Stone Forest Corporate Advisory to carry out a valuation of the company.
An audit committee said a valuation may help to reconstruct Sino Techfibre's accounts which were lost in a fire. The company had announced last April that a fire at its offices in China had destroyed its books and financial records. (Editing by Rachel Armstrong)
THESE ARE MY COMMENTS:-WHAT DO YOU EXPECT OF SINGAPORE,GUYS?WHY DID I EXPECT FOREIGN COMPANIES WHO COME TO SGX TO LIST,MAJORITY ARE "BLOWN UP" TO BE VERY GOOD?
U JUST THINK WHAT I SAY:COMPANIES COME TO LIST IS TO GET WHAT?MONEY RIGHT?IPO MONEY RIGHT?SINGAPOREANS MAJORITY SALARIES TIED UP WHERE?CPF RIGHT?CAN CPF $ BE USED TO BID IPO?CANNOT RIGHT??THEN WHERE THE BIDDING IPO MONEY COME FROM???READY CASH RIGHT??
WITH MAJORITY SINGAPOREANS' MAJORITY SALARIES TIED UP IN CPF,DO YOU THINK MANY WILL HAVE ENOUGH READY CASH TO BID FOR IPOS?????????VERY GOOD COMPANIES WANT TO GET A FEW BILLIONS IN IPO,NOT A FEW MILLIONS.SO WHO WILL COME TO SINGAPORE TO LIST?-THE LOUSY COMPANIES BUT HAVE TO BE PAINTED TO BE GOOD.
THAT IS WHY I SAID IN MY BLOG LONG LONG TIME AGO THAT ALTHOUGH IM A SINGAPOREAN,I DO NOT KNOW HOW TO APPRECIATE SINGAPORE POPULATION DEMOGRAPHICS,THAT IS WHY I WILL NEVER BUY HIGH END RESIDENTIAL CONDO,APARTMENTS.COMMERCIAL,THEN I WILL CONSIDER AS IT IS A DIFFERENT BALL GAME.
comments from singaporeans in forum:-
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Yuen "I have previously wrote the SGX about status of China Hongx which has been suspended for some time. Till today have not heard from them.Why isn't atime limit set on them? So many "China" listed companies have discrepencies and got suspended . One wonders why SGX is still allowing those company to list in the SGX - probably to make profits for SGX at the expense of the shareholders."HELLO YUEN,IF YOU ARE READING MY BLOG NOW.IF SINGAPOREANS ARE CASH RICH,DO YOU THINK WILL HAVE SO MANY FOREIGN CON-PANIES?AFTER THE MALAYSIA SCANDAL LAST TIME,2008 IS THE START OF THE CHINA SCANDALS.
WHY SINGAPORE SGX IS WELL KNOWN TO US,FULLTIME TRADERS, AS A "REJECT","3rd tier" HUB?THOSE WHO CANT LIST IN CHINA HOMELAND,WILL LIST IN HONGKONG.THOSE WHO CANT LIST IN HONGKONG,THEN WILL COME TO SINGAPORE.IT IS A WELL KNOWN FACT THAT HKEX HAS STRICTER LISTING REGULATIONS.WHY???
YUEN,U WANT SGX TO BE STRICTER WITH FOREIGN CON-PANIES?HOW?IF SGX IS AS STRICT AS HKEX(WHERE HKERS ARE MORE CASH RICH,NO 35%CPF,NO 7%GST,NO COE,NO ERP),THEN HAHAHAHA NOBODY WANT TO LIST HERE ALREADY.HAHAHAHA COME ON WAKE UP LAH
THE POPULATION DEMOGRAPHICS OF SINGAPORE IS WRONG IN THE 1ST PLACE.IT IS WELL KNOWN THAT HK IPOS RAISE MUCH MUCH MUCH MORE MONEY THAN SINGAPORE IPOS.
SORRY TO GUYS LIKE YUEN,THIS TREND THAT HK RAISE MUCH MUCH MORE IPO $ THAN SINGAPORE +HKEX HAS STRICTER LISTING REGULATIONS THAN SGX,WILL NEVER CHANGE,UNLESS THE SOCIAL DEMOGRAPHICS OF SINGAPORE CHANGE 1st.
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