SC REPRIMANDS 3 CHINA-BASED FIRMS
China Stationery, Xingquan and Maxwell taken to task for furnishing false and misleading financial statements
CORPORATE governance is at stake for three China-based companies listed on Bursa Malaysia as they have been taken to task by the Securities Commission (SC) for various breaches of securities laws.
These included furnishing false and misleading financial statements
to Bursa Malaysia, said SC in a statement yesterday.
The companies are China Stationery Ltd (CSL), Xingquan International Sports Holdings Ltd and Maxwell International Holdings Bhd.
The SC said the retention of office by four directors of the companies was prejudicial to public interest.
The four are CSL executive chairman and chief executive officer (CEO) Chan Fung @ Kwan Wing Yin, Xingquan executive chairman and CEO Datuk Wu Qingquan and executive director Wu Lianfa, and Maxwell executive director Li Kwai Chun.
“In making the public statement under section 354(3)(f)(ii) of the Capital Markets and Services Act 2007 (CMSA) against the four directors, we took into consideration, among others, the seriousness of the breaches committed by the individuals,” said SC.
It also reprimanded several individuals from the companies’ boards of directors and managements.
Chan was reprimanded for furnishing false or misleading financial statements to Bursa. The SC also reprimanded him for causing two of CSL’s wholly-owned subsidiaries to be guarantors for his personal loans with the intention of causing wrongful loss to the subsidiaries.
Chan was reprimanded for failure to provide a response to the SC when served with written notices requesting for information.
The SC reprimanded Wu Qingquan and Wu Lianfa for falsely recording a loss of 415.7 million yuan (RM252.6 million) from the sale of inventory by Xingquan’s wholly-owned subsidiary, furnishing to Bursa a false agreement between the said subsidiaries and a third party, furnishing false or misleading financial statements to Bursa and recording cash and bank balances in eight bank accounts collectively belonging to Xingquan that were false or misleading.
They were also reprimanded for failure to provide a response to the SC when served with written notices requesting for information.
Xingquan committed breaches of Bursa Malaysia Securities Main Market Listing Requirements, and actions had been taken by Bursa.
SC reprimanded some of Maxwell boards and managements for false or misleading information in its financial statements over a payment of 45.6 million yuan by Maxwell’s whollyowned subsidiary.