<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published May 6, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>CHINA SUN SAGA
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Meeting called, but will China side show up?
By TEH SHI NING
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(SINGAPORE) China Sun Bio-chem's independent directors (IDs) have called for an urgent board meeting this afternoon, but it is unclear whether the other China-based executive directors (EDs), including CEO Sun Guiji, will show up.
On the agenda is the status of corn transactions and bank balances worth 592 million yuan (S$129 million), about which three IDs expressed 'grave concerns' in a stock exchange filing on Monday, which they made despite objections and an alleged threat from the EDs.
Lai Seng Kwoon, Teo Moh Gin and Loo Choon Chiaw also outlined the obstacles that auditors' investigations ran up against in the company's China offices, including the theft of a truck transporting accounting records and a sudden power cut during computer forensic procedures.
Mr Sun and the two other EDs did not respond to BT's emails, but audit committee chairman Mr Lai said that the EDs have expressed shock at Monday's announcement and repeated an earlier warning that they would hold the IDs responsible for any losses due to this announcement.
'If the IDs are acting in good faith and trying to discharge their duties, and trying to keep stakeholders apprised of the situation, then they should not be concerned about this threat,' said Mak Yuen Teen, co-director of the Corporate Governance and Financial Reporting Centre at the NUS Business School.
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</TD></TR></TBODY></TABLE>David Gerald, president of the Securities Investors Association (Singapore), felt that the EDs' objection was 'nonsensical'.
'They should not object; they should stand for the disclosure of such material facts to shareholders and interested parties. As far as SIAS is concerned, the independent directors are doing the right thing,' he said.
China Sun's results for FY2008 have yet to be finalised. In March, PricewaterhouseCoopers said it was 'not possible' to complete its results audit. KPMG was then appointed to conduct an independent review, but given the loss of accounting records, this will likely not be meaningfully completed either, said the IDs.
Prof Mak thinks that a third review may be of little use. 'The key issue is that the management of foreign listings can virtually do what they like and get away with it because we just cannot enforce our rules against them,' he said.
Mr Gerald observed that 'this has been a problem with S-chip companies, where independent directors based here have problems communicating with the majority shareholders or management in China'.
The Singapore Exchange (SGX) when contacted said that it does not publicly discuss its dealings with listed companies.
Mr Lai said that the directors will 'discuss the way forward' at the meeting today. The EDs have said that they think the proposed board meeting 'will not be constructive', but whether or not they will attend remains to be seen, Mr Lai said.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>CHINA SUN SAGA
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Meeting called, but will China side show up?
By TEH SHI NING
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) China Sun Bio-chem's independent directors (IDs) have called for an urgent board meeting this afternoon, but it is unclear whether the other China-based executive directors (EDs), including CEO Sun Guiji, will show up.
On the agenda is the status of corn transactions and bank balances worth 592 million yuan (S$129 million), about which three IDs expressed 'grave concerns' in a stock exchange filing on Monday, which they made despite objections and an alleged threat from the EDs.
Lai Seng Kwoon, Teo Moh Gin and Loo Choon Chiaw also outlined the obstacles that auditors' investigations ran up against in the company's China offices, including the theft of a truck transporting accounting records and a sudden power cut during computer forensic procedures.
Mr Sun and the two other EDs did not respond to BT's emails, but audit committee chairman Mr Lai said that the EDs have expressed shock at Monday's announcement and repeated an earlier warning that they would hold the IDs responsible for any losses due to this announcement.
'If the IDs are acting in good faith and trying to discharge their duties, and trying to keep stakeholders apprised of the situation, then they should not be concerned about this threat,' said Mak Yuen Teen, co-director of the Corporate Governance and Financial Reporting Centre at the NUS Business School.
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'They should not object; they should stand for the disclosure of such material facts to shareholders and interested parties. As far as SIAS is concerned, the independent directors are doing the right thing,' he said.
China Sun's results for FY2008 have yet to be finalised. In March, PricewaterhouseCoopers said it was 'not possible' to complete its results audit. KPMG was then appointed to conduct an independent review, but given the loss of accounting records, this will likely not be meaningfully completed either, said the IDs.
Prof Mak thinks that a third review may be of little use. 'The key issue is that the management of foreign listings can virtually do what they like and get away with it because we just cannot enforce our rules against them,' he said.
Mr Gerald observed that 'this has been a problem with S-chip companies, where independent directors based here have problems communicating with the majority shareholders or management in China'.
The Singapore Exchange (SGX) when contacted said that it does not publicly discuss its dealings with listed companies.
Mr Lai said that the directors will 'discuss the way forward' at the meeting today. The EDs have said that they think the proposed board meeting 'will not be constructive', but whether or not they will attend remains to be seen, Mr Lai said.
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