LONDON (Alliance News) - Shares in Sorbic International PLC were suspended Friday at the company's request, pending clarification of its financial position.
Sorbic said it will make further announcements in due course.
On April 22, the food preservative sorbate producer removed Wang Yan Ting as chief executive of the group following ongoing problems with the company receiving funds from its Chinese subsidiary. It has been chasing funds owed to the company by Linyi Van Science and Technique, of which Wang was also chief executive, since August 2014.
In August 2014, Sorbic said it had extended the repayment deadline for GBP3.6 million in outstanding loan stock owed to the company from its Chinese operating subsidiary to the end of 2014. The balance remains unpaid and in default and Sorbic visited China to expedite the redemption of the outstanding loan stock and discussions were held between Sorbic and Wang concerning the problem.
The funds constrained in China are now much higher than the original GBP3.8 million, due to interest, a redemption premium, and compensation to cover Sorbic's expenses.
Prior to Wang's removal, Sorbic appointed eCFO, a Chinese business consultancy, to try to recover the funds. The new board of the Chinese subsidiary will consist of the company's new legal representative in China, Cai Lun, and two directors of eCFO, Jay Boyle and Matt Winter.
"Following these changes, the new team will focus on releasing the funds held within China of approximately GBP7.8 million as of March 31, 2015, and improving the financial performance of Linyi Van Science and Technique operations in China," Sorbic had said.
The company's shares last traded on April 27 at 2.72 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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