China Gaoxian Fibre Holdings has been informed by its auditors, Ernst & Young, that it could not verify nor confirm the bank balances in the company’s subsidiaries. The subsidiaries are Zhejiang Huagang Polyester Industrial and Fujian New Huawei Fibre Dyeing.
The trading halt of its shares (called on 22nd March 2011) has been converted to a suspension.
China Gaoxian Fibre Fabric suspension (Filing to SGX)
The inability to verify bank accounts has been a common theme in S-chips. Now you know why some of them trade at a price where the net cash balance is higher than the market capitalization.
Sadly, the failure of so many S-chips means that the hard earned money of many Singaporean investors have been siphoned away.
At a time and place where pretty much everything is Cavest Emptor, the individual investor really has to depend on himself as the last time of defence to look after his own interests.
In another not so widely reported news, the auditors of Anwell Technology, a Singapore listed company with its business in Hong Kong/China, has expressed concerned that it’s current liabilities exceed it’s current assets. This indicate the existence of a material uncertainty which may cast significant doubt on the Group’s ability to continue as a going concern. More on Anwell another day.
China Gaoxian now wants trading suspended (Todayonline)