LONDON (Alliance News) - Sorbic International PLC Thursday said its former Chief Executive Wang Yan Ting is refusing to hand over the corporate seals and business licenses of its Chinese operating subsidiary, and he is also refusing to handover about GBP7.7 million in cash that Sorbic claims belongs to it, meaning its financial position remains uncertain.
Sorbic last month said it had removed Wang as group CEO and as CEO of its Chinese subsidary, Linyi Van Science and Technique, because it was still frustrated by its inability to move money out of China, a move that Wang was blocking. It wanted the money to repay outstanding loan stock of about GBP3.75 million and to cover its own costs. It also terminated Wang's role as its legal representative in China, replacing him with a Chinese lawyer, and said it would focus on releasing the funds held within China.
On Thursday, Sorbic said Wang has declined to hand-over the company's corporate seals, known as chops, and business licences, which he removed from the premises before he was dismissed. The local police were contacted, but deemed Wang's non-cooperation as a commercial matter and were therefore unwilling to assist, the sorbate food preservative producer said.
That means that the subsidiary's bank accounts and day-to-day operations still remain under Wang's control.
"Furthermore, Mr. Wang has confirmed that he has transferred funds belonging to the company which remain under his control and, to date, he has refused to return them," Sorbic added, saying that management accounts as of end-March showed total cash balances of about CNY72 million, or GBP7.7 million.
"The board has been informed that the company's factory in Linyi continues to be fully operational and Mr. Wang remains in regular contact with the company," Sorbic said.
Sorbic is wholly reliant on the transfer of funds from China to meet its operating costs and to repay the GBP3.75 million in outstanding loan notes, which are in default.
Sorbic's shares were suspended last week at the request of the company pending clarification of its financial position. It said Thursday its shares will remain suspended and it will provide further updates in due course.
By Steve McGrath; email@example.com; @stevemcgrath1
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