Embattled Shanshui Cement strives to set house in order as Hong Kong exchange’s delisting deadline looms
New auditor Moore Stephens CPA steps in to complete audits on financial statements for last year before Hong Kong stock exchange’s October 31 deadline after KPMG quits
The new board of the embattled China Shanshui Cement Group is racing against a tight deadline to prevent the company from being delisted after a botched hostile takeover attempt by a rival three years ago that led to a trading suspension.
But the odds are not in their favour. The auditor KPMG resigned last month, which means it will be extremely challenging for the new auditor, Moore Stephens CPA, to complete the 2017 audit, resolve prior years’ audit issues identified by KPMG, and for the board to find new investors to restore its public shareholding to at least 25 per cent – from 3.36 per cent – before the Hong Kong stock exchange’s October 31 deadline.
Since the start of this month, the bourse has implemented new delisting rules that would make it easier to delist companies after 18 months of continuous suspension if they fail to meet conditions for trading to resume.
Chang Zhangli, the new chairman of China Shanshui – previously the nation’s seventh largest cement maker – has put on a brave face, saying the board will try its best to get the shares trading again.
“We have done a lot of work on improving the company’s governance on the board level, management level, as well as on information disclosure,” he said in an interview, adding that some 1.4 billion yuan (US$203.6 million) of debt has been repaid this year, reducing outstanding loans and bonds to 9.4 billion yuan as of July.
