Singapore Exchange Accuses China Fibretech Chairman Wu Xinhua of Violating Chinese Law
Yicai Global
/SOURCE : Yicai
Singapore Exchange Accuses China Fibretech Chairman Wu Xinhua of Violating Chinese Law

(Yicai Global) March 31 -- The Singapore Exchange Ltd. (SGX) [SGX:S68] has taken an unprecedented action, filing an accusation with the Chinese authorities saying Wu Xinhua, executive chairman and president of China Fibretech Ltd. [SG:AXL], violated China's criminal laws.

The exchange indicated in an announcement that its allegations against Wu Xinhua involved multiple violations of Chinese law, Nanyang Sin-Chew Lianhe Zaobao reported yesterday. SGX filed a claim with the help of the law firms in Singapore and China that provided it legal advice in 2016.

Although the Singapore Exchange did not disclose specific charges, it is believed that the case is about suspicions surrounding a CNY470 million (USD68 million) China Fibretech fund that Wu used when he approved a non-compliant compensation to a Chinese customer.

SGX has also submitted the matter to the relevant authorities in Singapore, the announcement says.

SGX filed a lawsuit with the relevant department under China's Ministry of Public Security and Shishi Public Security Bureau on March 29. The Singaporean authority handling this matter is the Commercial Affairs Department (CAD).

China Fibretech Ltd. is based in Shishi, Fujian Province. While it is listed on the Singapore Exchange, its substantial shareholders, principal operations, plants, and customers are in China. The company has suspended trading of shares since the end of November 2015. Information from the company's 2015 annual report indicated that Wu served as vice president of the Shishi Chamber of Commerce and has been a member of the Shishi Committee of the Chinese People's Political Consultative Conference (CPPCC) since 1999.

This the first time that a cross-border exchange has filed a lawsuit with foreign authorities. The actions taken by the Singapore Exchange illustrate its determination to do its best to handle such events.

"Singapore Exchange has filed a complaint with the Chinese authorities on possible violations of the Chinese criminal law, and this may have a direct effect on the irregularities in Singapore," a Singaporean police spokesman who confirmed the case submission said. "In this case, we will contact the Chinese authorities on this matter."

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Keywords: China , Singapore , Business , Stock , REGULATION , Fiber