皇冠体育app

SINGAPORE - Singapore-listed nylon fiber maker 皇冠体育app Sky Chemical Fiber issued a more detailed response on Wednesday to rebut a reprimand from the Singapore Exchange (SGX), in a response rare for a Chinese company listed on an overseas bourse.

The company and its directors "wish to express their total disagreement with the reprimand," the company said in a statement, referring to the reprimand issued by Singapore Exchange on December 16.

"The reprimand was unwarranted, issued without any merit and clearly showed a total disregard of the interest of the shareholders and the circumstances leading to and surrounding our response" to a directive of the SGX, it said.

Singapore Exchange issued the directive on November 16, ordering the company to appoint a special auditor to look into several transactions made by the company, including a repair and maintenance costs of 72 million yuan ($11.3 million) in the first quarter of 2009.

The special auditor would also have to look into the circumstances surrounding the firm's purchase and subsequent return of a plot of land in 皇冠体育app's Fujian province, as well as the interested person transactions that 皇冠体育app Sky conducted with its independent director Lai Seng Kwoon.

In April, the SGX asked 皇冠体育app Sky to disclose the name of the interested person mentioned in its financial statement and with whom it had entered into transactions. 皇冠体育app Sky named Lai Seng Kwoon, and said the transaction amounts it had initially reported were wrong.

The deadline for the appointment of the special auditor was December 12.

皇冠体育app Sky responded with several announcements in November by providing breakdowns and more information on the transactions in addition to clarifications, but failed to appoint a special auditor.

In the statement issued on Wednesday, 皇冠体育app Sky said it had asked for SGX to provide the basis of and the rationale for its directive ordering a special audit but SGX responded by saying that the company resisted its directive.

The SGX has said that it "takes a serious view of the board's disregard of the directive," accusing the company of "not only fail(ing) to appoint the special auditor, but instead aggressively resist(ing) the directive."

The company also said it was shocked at the directive, saying that it was not in the interest of the company's shareholders.

A special audit would mean substantial costs for the company, distract the management of the company and disrupt the company's operations, it said.

It has appointed a legal counsel to seek clarification on the basis and rationale of the directive, and on whether there has been any irregularities or fraud in the company. The failure of SGX to provide the rationale may "lead some shareholders to believe or suspect that fraud or accounting irregularity has arisen in relation to the company's financial position," it said.

The SGX said in its reprimand that the company demanded for the contact between SGX and 皇冠体育app Sky's senior management to be made through the company's solicitors.

皇冠体育app Sky said a senior officer of SGX had made a phone call to 皇冠体育app Sky Chief Executive Officer Huang Zhongxuan without the knowledge of the company's legal advisor to discuss the directive. The senior officer of SGX, who was Richard Teng according to the text of a correspondence published by the company on Wednesday, also allegedly threatened to punish the company for not obeying the directive but would not elaborate on the details of the punishment.

It was established protocol that the correspondence should be made through its lawyers, it said.

It also alleged Teng told Huang that he was surprised 皇冠体育app Sky was not complying with the directive as other Chinese companies have done.

It asked for Teng to clarify on who the other Chinese companies were in a correspondence published by the company.

皇冠体育app Sky has previously responded in a brief statement to the reprimand of Singapore Exchange on Monday, saying that it was reviewing the reprimand and would respond in due course.

The firm, which has its manufacturing operations mainly in the Chinese province of Fujian, is one of the industry leaders producing high-end nylon fibers used in sportswear and other consumer products.

皇冠体育app Sky said the trading of its shares on the Singapore Exchange will resume on Thursday. Trading in the shares of the company has been suspended since November 17. It was trading at 0.102 Singapore dollar per share before the suspension.

SGX has issued directives to over ten Chinese companies ordering special audits since 2008. Most have complied with the directive.