With solar developer and lithium-ion energy storage business Comtec Solar preparing for a rapid relocation to Jiangsu province to secure state funding, the company's board has opened up on the reasons which, presumably, explain why it lost its auditor this month.
Paris-based professional-services-company membership body Mazars walked away from Comtec on March 8, citing “professional risk associated with the audit.” Announcing the development the following week, the Comtec board said merely that the “legal proceeding” highlighted by Mazars “was immaterial as it only involved a very insignificant amount of money.”
The board on Sunday admitted it had breached the announcement rules of the Hong Kong Stock Exchange where it is listed and said the amount referred to was US$525,000 owed in loans and interest to Putana Ltd.
Petition
It emerged Putana filed a petition to wind up Comtec in January, at the Court of First Instance of the High Court of Hong Kong, in relation to the loans, half of which are due to mature on April 20 and the balance on July 20.
Comtec said the petition was not spotted until its auditor performed a regular check “a few days before the Chinese New Year holidays,” which began on February 12. The company said it then resolved the matter, with the winding-up petition withdrawn on March 10. The board explained the loans had not been addressed previously “owing to the change of some senior management staff of the company.”
The solar company on Sunday said its failure to report the winding-up petition previously, constituted “an inadvertent oversight of the announcement obligations of the rules,” and pledged to “take positive steps to strengthen its internal control policy to comply with its disclosure obligations under the listing rules.”
The revelation came three days after the company announced its intent to rapidly move its headquarters to Changzhou city, Jiangsu province, in return for RMB50 million (US$7.68 million) of public funds.
The developer will accept RMB10 million to cover its relocation costs, from Jiangsu Changzhou Tianning Economic Development Zone Management Committee and Changzhou Tianning Investment Service Center. The two local government entities will also commit to take at least RMB40 million equity in Comtec and the new subsidiary which will be created as a result: New Energy Intelligent Logistics Changzhou Ltd Co, under the terms of a strategic framework agreement signed between the three partners last week.
As part of the deal, Comtec will relocate by the end of the month.
In a separate announcement, made late in yesterday's session, Comtec said Kang Sun had resigned as independent non-executive director to spend more time on his other personal commitments. Sun sat on the audit, nomination and remuneration committees.
This copy was amended on 23/03/21 to include the update on Kang Sun.
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