The Straits Times on January 6, 2012, reported that the China based firm in its filing to Singapore Exchange (SGX), said it “has yet to receive all the necessary clarification and explanations from SGX to support their basis and rationale of the directive although it has formally written to SGX to seek the same.
“Accordingly, the company is still not in a position to decide on the appointment of the special auditor.”
China Sky claimed: “The starting fees for the special audit would range between RMB 1.5 million and RMB 2 million… the company believes that as the matters within the scope of the special audit had been appropriately dealt with in the past, during these uncertain economic times, it should not be incurring such unnecessary costs.” The Chinese currency renminbi (RMB) or yuan 1.5 million is equal to S$306,900.
All three of its independent directors stepped down on Thursday, January 6, 2012.
The fallout from the China Sky saga will further deepen Singaporean investors’ cynicism about the problematic S-chip (SGX listed Chinese companies) sector which has been dogged by a series of accounting scandals in recent years. Some S-chips have a big following with more than 15,000 shareholders each. This further erosion of confidence will reverberate far beyond the confines of China Sky.