Hongwei’s directors asked to resign

As RMB120m or S$24m worth of ‘advance payments’ are put under question.

KPMG was appointed as special auditors to investigate into the affairs of the Company in relation to the issues pertaining to the cash and bank balances confirmation in its subsidiary company in China, namely Shuangli Polyester Co., Ltd.

It was discovered that the company’s bank statements were fabricated as RMB120m worth of ‘advance payments’ were actually loans to suppliers, a fact which was not previously disclosed.

The Audit Committee has decided that the company should immediately stop trading with Wanzhong as Mr. Lin Shengmin, the majority owner of Wanzhong, could be the father of Mr. Lin Jimiao, making transactions with the Company as interested party transactions.

According to the Committee’s statement, “In view of KPMG’s findings, the Audit Committee would like the directors namely, Mr. Lin Jimiao and Mr. Wu Gouxin who were implicated in the report to step down as directors. As Madam Zhuang XinXin is the spouse of Mr. Lin, she should also resign.”