China Environment: Subsidiary formed liquidation committee without informing company

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China Environment said on Thursday that it had been informed recently by a business partner that its wholly owned subsidiary, Xiamen Gongyuan Environmental Protection Technology (XMGY), had formed a liquidation committee.

XMGY’s legal representative Wu Jida had not informed China Environment, it said in a filing to SGX on Thursday.

After China Environment sought clarification, the legal representative told the company’s Singapore management that a liquidation committee had been formed, but that XMGY had not commenced liquidation due to outstanding tax liabilities and financial inability to engage a liquidator, the filing said.

XMGY management has told Singapore management that they would hand over accounting records once their unpaid salaries, compensation and claims amounting to 649,000 yuan are paid, it said.

“The company will continue to remind XMGY [of] the seriousness of the matter and persuade XMGY to cooperate fully with the company instructions,” China Environment said.

The subsidiary was incorporated by China Environment’s previous management, but hasn’t started its intended business of manufacturing and selling a trans-critical carbon dioxide heat pump system, the filing said. It added that XMGY’s unaudited accounts indicate it is in a net liabilities position as of fiscal 2016.

China Environment’s shares have been suspended from trade since 2016.

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