The price of H share Guangdong Kelon Electrical slumped 15.11 per cent amid uncertainty about the company's financial fundamentals and concerns about last year's widening losses. The company's auditor, Arthur Anderson Huaqiang, cast doubts on the refrigerator and appliance-maker's ability to continue as a going concern in its results announcement. The opinion was based on the company's 'massive' operating loss and negative working capital, as well as its inability to ensure the full disclosure of connected transactions already done with its former parent Rongsheng Group. The counter's Hong Kong-listed H share slid 15.11 per cent to close at HK$1.18 yesterday, while its Shenzhen-listed A shares eased down 1.56 per cent to close at 11.36 yuan, as the dually listed stock resumed trading after suspension the day before. Kelon was dragged into financial trouble after advancing 1.26 billion yuan (about HK$1.1 billion) to the unlisted Rongsheng through a series of undisclosed connected transactions involving bank borrowings, purchase of raw materials, payment of advertising costs, bank guarantees and debt transfer. The H share was also found to have provided a guarantee to Rongsheng over a 230 million yuan loan without shareholders' approval. The company has to repay 211 million yuan of the debt on behalf of Rongsheng. The malpractices have been exposed in an investigation by the China Securities Regulatory Commission. Arthur Anderson Huaqiang said Kelon Electrical 'may have possible additional losses and reclassification of assets . . . which could increase its losses and current liabilities' because the auditor was unable to obtain reasonable representations and assurances from management. 'Most of the board members and senior management of the company who are responsible for the operations of 2001 have resigned,' the auditor said.