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Denise Tsang

Power producer claims requests for clarification on $254,660 bill not met

Incineration waste power producer China Conservational Power Holdings is seeking shareholders' approval to sack its auditor, HLB Hodgson Impey Cheng, in a dispute over fees.

Citing 'a breakdown in communications' with the auditor, the firm issued a statement through the stock exchange yesterday saying  a replacement was urgently needed to ensure completion of  its  financial results for the past business year, which ended  on Friday.

The firm said it had taken the dispute to the Hong Kong Institute of Certified Public Accountants (HKICPA) and called for an extraordinary general meeting on April 24 to seek shareholders' approval for removing the auditor and appointing an  interim replacement.

HKICPA president Paul Chan Mo-po could not confirm that  the company had filed a complaint but said the institute could not handle disputes over audit fees.

'We do not get involved in commercial disputes. We only deal with cases of audit failures or misconduct of accountants,' Mr Chan said.

The dispute is the latest controversy to affect China Conservation after two former executive directors, Hon Ming-kong and Abba Chan Tat-chee, were charged by the Independent Commission Against Corruption in February with conspiracy to defraud and stealing corporate funds.

China Conservation said  in November last year HLB Hodgson claimed $254,660 in fees and disbursements for advising on adjusting the subscription price of its share option scheme and the acquisition of Citic Pharmaceutical.

The company said it had made repeated requests for documentary evidence and accused the  auditor of  'not responding satisfactorily'.

It also accused the auditor of ignoring requests to submit terms for audit work on the past financial year.

China Conservation said HLB Hodgson had refused to communicate directly with the company since January, resorting instead to correspondence through lawyers to demand settlement of the fee.

'The board considers that the unilateral imposition of the conditions to be totally unacceptable and is in the course of seeking the advice of the HKICPA as to whether the conditions ... are in accordance with the code of ethics for public accountants,'  the company said.

Company secretary Chow Man-ngan declined to comment further on the dispute pending the release of a circular for the shareholders' meeting. HLB Hodgson did not return calls.

Two weeks ago, HLB Hodgson  quit as auditor to China Sciences Conservational Power, an affiliated company after a disagreement over audit fees.

It was replaced by Horwath Hong Kong CPA.

Fuss over fees

China Conservation is seeking advice from accountants body

Meeting to seek shareholders' approval to sack auditor

The auditor had resigned from affiliated company over fees



China Conservation moves to sack auditor