Court orders Sino-Env EDs’ freeze of large asset sales
Independent Directors of Sino-Environment Technology Group were granted court orders to restrain their executive directors from selling any major assets.
According to the order by Justice Tay Yong Kwang, the executive directors are restrained from directly or indirectly disposing any of the assets of the Company and/or its subsidiaries, where the value of such asset is in excess of RMB500,000 or its equivalent without the prior written approval of the Audit Committee. They are also restrained from entering, concluding and negotiating any new contracts or agreements exceeding RMB5 million without the prior written approval of the Audit Committee.
They will be restrained from taking any step to curtail or terminate the mandate of the Auditors who are currently reviewing/investigating the affairs of the Company and be restrained from taking any step to curtail or terminate any further review/investigation into the affairs of the Company which may be carried out in the future.
These orders were made public in an announcement from the Independent Directors of the company.
The legal action comes after a report by auditors PricewaterhouseCoopers uncovering $85 million of transactions made without any approval from the board.
According to PwC’s report, a subsidiary of the company, China Energy, was found to have made a payment of approximately JPY 920 million or SGD 14 million to a Japanese company. Upon being approached, the company replied it had not received any payment from China Energy. This was also done without the approval of the board.