Citic Beijing has taken over the management of kitchen-material supplier GKC Holdings after directors allegedly involved in a fraud case resigned. Executive directors Eric Tang Yiu-hong, his brother Eugene Tang Yiu-chuen and the Tangs' in-law, Peter Cheung Chun-hung, stepped down on January 22. The same day, the Commercial Crime Bureau (CCB) raided GKC offices and seized documents in relation to the alleged fraud. The raid was triggered by a report by Citic Beijing to the police. Citic Beijing is suing the Tang brothers and Mr Cheung for a string of alleged rule breaches. The CCB has yet to make any arrests and investigations are continuing. GKC, 72 per cent-owned by a company that is in turn 60 per cent owned by the Tang family and 40 per cent by Citic Beijing, also saw the resignations of all the three non-executive directors and company secretary Katy Tang Lai-yun. The company said it was seeking to appoint two independent non-executive directors to replace Jenny Cheung Tze-shan and Lee Kin-hung. The Tang brothers' father, Tang Ting-kwan, also resigned as non-executive director. GKC's board now comprises representatives of Citic Beijing's wholly owned subsidiary, Shortridge: Sun Xiaowen, Wang Wenxi and William Chan Tak-chi. GKC's problems have prompted seven creditor banks and one finance company to recall $170 million in loans. The company has warned it now faced 'serious cash-flow problems'. GKC has warned of a possible removal of financial support from Shortridge, given the company's 'limited' finances. GKC denied it was in talks with any party that might result in a change of control. It said Shortridge had no intention of raising its GKC stake. As its auditors have yet to start work, GKC said it was not in a position to comment on its liquidity. The company was also unable to say whether the $105 million net proceeds from its listing in January would be used as described in the listing prospectus. It was also uncertain whether the $70 million profit forecast for the year to March this year was achieved.