Ocean Grand says transfer of funds omitted from disclosure

PUBLISHED : Wednesday, 09 August, 2006, 12:00am
UPDATED : Wednesday, 09 August, 2006, 12:00am
 

Ocean Grand Holdings, which went into liquidation last month with more than 800 million yuan in funds missing, and subsidiary Ocean Grand Chemicals Holdings admitted they omitted in earlier announcements details of dubious transfers involving hundreds of millions of yuan from their accounts, according to the latest announcement by the two firms.


Ocean Grand Holdings, a Hong Kong-listed aluminium extrusion products firm, went into liquidation last month after investigators found that the funds were missing and that the company had defaulted on loans.


The provisional liquidators of the two firms, Derek Lai Kar-yan and Joseph Lo Kin-ching, have reported their preliminary findings to the Commercial Crime Bureau, according to the firms' joint announcement to the stock exchange on Monday, signed by the liquidators.


'The liquidators suspect a criminal offence has taken place,' said David Webb, a corporate governance activist and independent director of the Hong Kong stock exchange. 'The disclosure falls short of what is required by Hong Kong listing rules. You're talking about hundreds of millions of yuan moved from company accounts.'


Three former non-executive directors of Ocean Grand Chemicals revealed in the announcement on Monday that certain details originally included in drafts of the two listed companies' announcements dated July 24 were omitted in the published versions.


The three former non-executive directors, Tommy Cheung Yu-yan, David Wan Ngar-yin and Yeh V-nee, resigned on July 26.


The omitted details include the fact that of the missing funds, international auditing firm Deloitte Touche Tohmatsu found 667.8 million yuan had been transferred from the bank accounts of several mainland subsidiaries of the two firms on July 16 and 17. Of this, Deloitte has identified the recipients of 468.1 million yuan, which were not companies related to Ocean Grand Holdings.


The Hong Kong stock exchange declined to comment on whether the omission of the details breached listing rules.


Mr Webb cited Listing Rule 13.09 (1), which requires listed firms to inform 'as soon as reasonably practicable' any information that might materially affect the market activity and price of the shares.


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