Firm answers query on fee
Shenzhen International Holdings says $1.04 million given in its 1995 annual report as being due from an immediate holding company represents a management consultancy fee paid on behalf of its shareholder, Maxton International.
Shenzhen International said the amount was paid to a consultancy firm for its services in 1994.
Since it was not satisfied with the consultancy firm's performance, Shenzhen International terminated the contract and paid the amount which Maxton later agreed to defray.
Two directors of Maxton were involved in the negotiation of the consultancy agreement.
Shenzhen International was responding to the listing division of the Hong Kong stock exchange, which said the amount due constituted an 'effect of granting financial assistance to its controlling shareholder'.