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Yep not very credible for a first posting.
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14-12-2013, 04:55 PM
(This post was last modified: 14-12-2013, 04:57 PM by cyclone.)
The company is operating in an environment of weak market demand and increased pricing pressure.
Now it is demanded to pay a total compesation of RMB 290 million for a purchase consideration of about RMB 4 million. Malays call it "Sudah jatuh ditimpa tangga".
FYI, group cash level as at 30 September 2013 was about RMB 290 million. What a concidence.
Quote:13 December 2013
The Board of Directors of Foreland Fabrictech Holdings Limited (the “Company”, together with its subsidiaries, the “Group”) wishes to inform that the Company’s wholly-owned subsidiary, Fulian Knitting Co., Ltd (晋 江 福 联 织 造 有 限 司 公 司) (“Fulian Knitting”) received a claim from its customer, Jiangxi Longdu Clothing & Accessories Weaving Limited Company (江 西 龙 都 服 饰 织 造 有 限 司 公 司) (“Jiangxi Longdu”) (the “Claim”).
Pursuant to the sale of goods contract and the supplemental contract dated 27 September 2013 and 29 September 2013 respectively entered into by Fulian Knitting with Jiangxi Longdu (collectively the “Contract”), Fulian Knitting had agreed to supply to Jiangxi Longdu 324,990 yards of high colour fastness taslon (the “textiles”) at a consideration of RMB 4,062,375.00.
On 17 November 2013, Jiangxi Longdu complained that the textiles supplied were defective (the “Complain”). Upon receipt of the Complain, the Company immediately commenced investigations from 19 November 2013 to 6 December 2013.
On 9 December 2013, Jiangxi Longdu demanded from Fulian Knitting a total compensation of RMB290 million for all losses and damages it had incurred in connection with the alleged breach of the Contract and defective products.
A Board meeting was convened in connection therewith on 11 December 2013. On 12 December 2013, the Company had engaged the Fujian Minhua Law Firm to provide its legal advice on the merits of the Claim.
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To claim a total compensation of RMB290 million for all losses and damages against an original purchase of goods of only about RMB4 million - this appears grossly out of proportion and more like a frivolous claim.
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Even more suspicious when the announcement was made yesterday.
"Criticism is the fertilizer of learning." - Sir John Templeton
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Iirc, after this, only 2 textile an accessories are left standing. But one wonder how long will it take before it hit china fibre tech and fuxing. Foreland used to give dividends rather regularly, apparently, this is little safeguard.
China fibreT nvm pay a dividend or do share back despite mountain of cash, refusing even to clear a small amt of debt.
Fuxing went on a acquisition spree just before the downturn and bought land for a new Hq at Xiamen just before the downturn came. When I point out to the possible cash crunch due to the big spending, Ex-CFo replied CEO is bullish on property at Xiamen and can sell offices at HK at a last resort which they did.
Anyone can point to me a textile company that is still going strong without red flags?
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
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(15-12-2013, 01:13 PM)Greenrookie Wrote: Anyone can point to me a textile company that is still going strong without red flags?
Well, not many if it's listed under SGX but there're a lot under HKex. Textile industry is quite huge and it is also dependent on which part of the industry you are looking at. Bigger players like Texhong, Weiqiao, Pacific Textiles or Texwinca are doing fine without any red flags.
"Criticism is the fertilizer of learning." - Sir John Templeton
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