Foreland Fabrictech

The above mentioned link by yeo san does not work. Possibly t is http://pucha.mingluji.com/江西龙都服饰织造有限公司

More detail for the claim, base on responses to SGX's queries. What a claim from losses of each finished apparel. 1500 RMB is approx 300 S$...

"The compensation claimed for each finished apparel is approximately RMB 1,500"

Ref: http://infopub.sgx.com/FileOpen/Foreland...eID=268175

(18-12-2013, 11:26 PM)CityFarmer Wrote: More detail for the claim, base on responses to SGX's queries. What a claim from losses of each finished apparel. 1500 RMB is approx 300 S$...

"The compensation claimed for each finished apparel is approximately RMB 1,500"

Ref: http://infopub.sgx.com/FileOpen/Foreland...eID=268175

Indeed, my first reaction as well when I read that announcement. Quite obvious what is going on here or I missing something/lost touch?

Update from the company on the claim. It doesn't sound good for the company...

(not vested)

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The Legal Opinion held that the Contracts entered into by Fulian Knitting with Jiangxi Longdu are valid
and legally binding under the laws of the Republic of China. As the Textiles supplied by Fulian Knitting
had failed to meet the quality requirements specified in the Contracts, the Legal Advisor opined that
Fulian Knitting would be liable to indemnify Jiangxi Longdu against all losses and damages incurred
therewith. Given that the Contracts underlying the Claim did not specify maximum liquidated damages in
the event of a breach, the Company is recommended by the Legal Advisor to engage an independent
auditor firm to assess the Claim and to determine a reasonable compensation amount based on the
actual losses suffered by Jiangxi Longdu.
The Company was also advised by the Legal Advisor to negotiate with Jiangxi Longdu for an amicable
settlement rather than resorting to litigation.

Ref: http://infopub.sgx.com/FileOpen/Foreland...eID=268992

(26-12-2013, 07:32 PM)CityFarmer Wrote: Update from the company on the claim. It doesn't sound good for the company...

(not vested)

------
The Legal Opinion held that the Contracts entered into by Fulian Knitting with Jiangxi Longdu are valid
and legally binding under the laws of the Republic of China. As the Textiles supplied by Fulian Knitting
had failed to meet the quality requirements specified in the Contracts, the Legal Advisor opined that
Fulian Knitting would be liable to indemnify Jiangxi Longdu against all losses and damages incurred
therewith. Given that the Contracts underlying the Claim did not specify maximum liquidated damages in
the event of a breach, the Company is recommended by the Legal Advisor to engage an independent
auditor firm to assess the Claim and to determine a reasonable compensation amount based on the
actual losses suffered by Jiangxi Longdu.
The Company was also advised by the Legal Advisor to negotiate with Jiangxi Longdu for an amicable
settlement rather than resorting to litigation.

Ref: http://infopub.sgx.com/FileOpen/Foreland...eID=268992

A few thoughts come to my mind:

While, there might not be ground for contest on liability,
surely there is ground for contest in terms of amount for liability.

Also,

If settlement is out of courts, resulting in a far smaller damage, it might make sense, but why not even a court challenge in the amount claim?

That would most likely make the other party consider outside court settlement.

Outside court settlement mean a lot of details need not come to the open.

(Not vested... I am glad I am out of it when chairman start selling.)

Well this I guess this serves as a lesson that cheap valuations is insufficient to justify a purchase. The share sales of the owner and giving up control (i.e. 51%) certainly does not bode well. Further to that CEO failed to turn up for AGM (reason was being unwell) and his son who sits on the board was unable to answer questions posted by investors. Independent director assured investors that he would bring up issues like share buy backs and dividend payment did not materialize. All in all, outlook seems murky and I would strongly suggest against vesting in this. Of course I believe there are contrarians around, but this time it would probably not pay off due to a poor management team.

[This is no cigarette to take a free puff from]


(vested)

Legal issues aside, the following strength was quoted in Foreland Fabrictech IPO Prospectus.


We have the capability to manufacture products that conform to various standards
The standards and requirements specified by our customers for our fabrics are generally
dependent on the market for their products. We are required to manufacture fabrics that meet
those standards and requirements. Such standards include AATCC, ASTM, DIN, JIS and ISO.
Some of our customers may also specify that our products be labelled with the Oeko-Tex100 or
the China Environmental Labelling. Each of these standards or product labellings has their
respective stringent requirements. With our well-equipped production facilities, requisite technical
know-how and sound management systems, we have been able to manufacture fabrics that
conform to the various standards or product labellings.
We observe that not many of our competitors possess such capabilities or certifications. Hence,
our Directors believe that we have a competitive edge over our competitors.


With such competitive strength, the company is looking for settlement??

Further update on the claim. It seems the claim is "accurate", which was appraised by professional accounting firm.

http://infopub.sgx.com/FileOpen/20140103...eID=269779

(03-01-2014, 09:19 PM)CityFarmer Wrote: Further update on the claim. It seems the claim is "accurate", which was appraised by professional accounting firm.

http://infopub.sgx.com/FileOpen/20140103...eID=269779

Why do I keep getting the feeling that instead of contesting aggressively or trying to solve the problem, foreland is more comfortable allowing the compensation to take place?

This is a new way to empty the kitty. Rather than just run off with the money, they committed legal suicide. Li hai...

I wonder how many copycats will this spur among the S-chips still left on the exchange.