25-04-2011, 12:05 PM
(25-04-2011, 07:55 AM)Musicwhiz Wrote: Business Times - 25 Apr 2011
Fire at Sino Techfibre factory destroys records
Blaze in Shandong facility may further obscure ongoing probe into its books
By WINSTON CHAI
A FIRE at the China factory of mainboard-listed Sino Techfibre could further obscure an ongoing probe into its books as key financial records have reportedly been destroyed in the incident.
According to a statement released by the firm late Friday night, a fire had broken out at the administrative premises within its primary production facility at Longkou City in Shandong province in the early morning of April 20.
While the blaze did not cause any deaths or injuries, the financial records that were kept in the affected office have been destroyed, Sino Techfibre revealed.
'The company has reported the incident to the local police, and the latter has commenced the necessary investigations,' it said.
'The cause of the fire and actual extent of the damage are currently still unknown, pending the completion of the police investigations into the fire and issuance of their report,' it added.
The incident happened a week after the firm was red-flagged by external auditors Ernst & Young (E&Y) for accounting irregularities, adding to recent scandals surrounding the bookkeeping practices of several other China-linked companies.
Specifically, E&Y uncovered some discrepancies in the invoices issued by the firm and its suppliers.
Sino Techfibre said that it could not locate the sales manager who is at centre of this controversy, and has since lodged a local police report.
As E&Y did not obtain a satisfactory explanation on the issue, it could not complete and issue the audit report on Sino Techfibre.
In an update last Friday, the Chinese maker of polyurethane (PU) and microfibre synthetic leather products also announced that it has appointed an interim chairman and CEO following E&Y's findings.
Sino Techfibre's existing CEO Li Wenheng has been 're-designated as an executive director' until further notice, the firm said.
Independent director Tay Wee Kwang has taken over as Sino Techfibre's interim chief while Lee Wing Hang, another independent director, has been appointed as its interim chairman.
As part of his responsibilities, Mr Tay will oversee the independent investigations into the company's audit issues as well as review the investigation report on last week's fire. He will also take over the company seals of Sino Techfibre and all its subsidiaries.
Sino Techfibre is currently finalising the appointment of E&Y for an expanded audit.
In anticipation of this move, Sino Techfibre said that it has been 'making the necessary preparatory work in respect of the relevant books and financial records of the company' prior to last Wednesday's blaze.
The counter has been suspended from trading since April 19.
This is just downright blatant.