YIU Wing International managing director Cheng Chao-ming has made a bid to clear up a controversy linked to an auditor's qualification of the group's results.
He said yesterday that he had paid $22 million to Yiu Wing to fill an alleged shortfall of the guaranteed profit of an associated company, Changfa Electric Power Equipment Co.
Auditors of Yiu Wing qualified the accounts regarding the company's interests in Changfa - worth $87.3 million - and share profits of $23.75 million.
The auditors said the relevant accounts lacked sufficient information to re-state the figures under Hong Kong accounting rules.
Mr Cheng said he made the payment at the August 22 board meeting. According to Mr Cheng, the mainland partner in Changfa, China Changjiang Energy Corp, guaranteed a profit of not less than 70 million yuan (about HK$65.1 million) when it formed the joint venture, Changfa, with his own company Changjiang Power Development (Hong Kong).
Mr Cheng later sold his stake, an estimated 48 per cent of Changfa, to Yiu Wing.
Mr Cheng said he had already paid the shortfall in the guaranteed profit and he was planning to take legal action against Changjiang Energy Corp for failing to meet its guarantee.
