China Logistics reports $1.12b loss as missing millions mount
Troubled mainland-backed company China Logistics has restated its interim results for last year, posting a HK$1.12 billion loss after taking massive provisions for hundreds of millions of dollars in missing money and soured investments in China.
The loss was more than 10 times the company's HK$101.9 million turnover in the six months to September 30 last year. It will raise further red flags for investors worried by corporate governance standards of SAR-listed companies.
It compares with a profit of HK$8.07 million in the year-earlier period and turnover of HK$111.56 million. A profit of 0.19 cent per share turned into a loss of 76.98 cents per share.
China Logistics shares have been suspended since May 28 when the company announced the 'sudden departure' of chairman Yuen Wai. The stock last traded at 22.5 HK cents.
The company had first produced unaudited interim figures in February showing a loss of HK$200.54 million.
It was revealed last week that auditors PricewaterhouseCoopers had walked out on China Logistics after the accountancy giant refused to sign off on restated results with increased provisions.
The auditors said they were not given enough information about the additional losses the company wanted to report and steps taken to recover the money.
China Logistics has the backing of state commodities distributor China Hutaong Distribution and Industry (Group). Hutaong holds a direct 6.83 per cent stake and is thought to hold another 35.03 per cent through using proxies - Mr Yuen and Mongkon Cherloemchoedchoo, a Thai national.
Analysts said Huatong might have to stump up more cash, given the heavy loss was in real cash rather than purely an accounting number.
'It's quite hard to keep going if they can't find investors to inject new money into the company. Most of the assets they are holding are not profitable,' Kenny Tang Sing-hing, associate director at Tung Tai Securities said.
China Logistics once courted investors as a play on the huge growth in China's logistics industry. It claimed to have a contract to distribute goods from Procter & Gamble in the mainland.
In May, sportswear giant Puma terminated its contract with the company for the production and distribution of its products on the mainland and in Taiwan and Hong Kong, Bloomberg reported.
