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Consumer Staples

Pacific Andes (1174 HK)

Year: 2015

Almost immediately after securing a US$650m club loan in 2014, the Pacific Andes Group began to breach various terms. This prompted one of its largest bankers, HSBC, to engage FTI to conduct an investigation. This concluded that the group was involved in a number of fictitious transactions to inflate revenues and profits. The loan appears to have been redirected to secure the acquisition of Copeinca, a Norweign fishing company. The group defaulted on the loan in November 2015 which prompted a share trading suspension. The group then took creditors by surprise when it filed for bankruptcy in the US, presumably to secure the best liquidation terms, in breach of various agreements. FTI was appointed liquidator in 2017.

Last updated: 13 August 2021

China Fishery (CFG DP) is a coastal and deep-sea fishing company listed in Singapore which primarily operates in China and Peru. It was controlled by another Singapore-listed company Pacific Andes Resources (PAH SP), which has a 71% stake. PAH is in turn controlled by a Hong Kong-listed company, Pacific Andes International (PAIH, 1174 HK) which owns a 66% stake.

PAIH listed on the Hong Kong Stock Exchange in 1994. Two years later, the group’s resource development and trading arm, Pacific Andes Holdings, issued shares on the Singapore Stock Exchange. China Fishery was acquired in 2003 and then listed on the Singapore exchange in 2006.

Asia’s biggest banks extended a $650m loan in March 2014 to various units of the group. Almost immediately thereafter, creditors raised concerns regarding the Ng family over “questionable transactions totalling more than $1bn and suspicions of substantial overstatements of revenues and receivables/prepayments” made by the group. In late 2014, HSBC commissioned the Hong Kong office of FTI to find out what happened to its money - more than $100m. According to FTI, the monies provided by creditors to PAIH subsidiaries flowed in a circular pattern between the subsidiaries and purportedly independent “agent” companies that reportedly sold fish to Pacific Andes, creating fake profits and revenues in the process. It is speculated that the group may have redirected funds lent for the purpose of buying fish to help fund the NOK4.8bn ($806m) acquisition of Copeinca in 2014, a Norweign fishing company.

The Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) began a probe in August 2015. They required China Fishery and Pacific Andes Resources to provide information and documents from 1 October 2011 to 20 August 2015 relating to both companies and their subsidiaries, as well as their dealings with certain third parties including the group’s trading party. Government agencies were investigating the companies for an offence under the Securities and Futures Act.

In November 2015, the group defaulted on a US$31m instalment of its US$650m loan, leading to the suspension of shares in all three listed group companies. In June 2016, the group filed for US bankruptcy protection, which took creditors by surprise. By filing for Chapter 11, the Pacific Andes Group, according to the Club Lenders, breached various undertakings. The company also removed the Chief Restructuring Officer appointed by agreement between the Lenders and the Group.

In July 2016, the independent review committee of Pacific Andes appointed RSM Corporate Advisory to undertake a forensic review. The findings have not yet been made public.

In 2017, FTI was appointed by a court in the British Virgin Islands (BVI) as the liquidator of 11 Pacific Andes-linked subsidiaries and agents. 

In October 2019, MAS and the CAD concluded their four-year investigation with no further action.

The shares of China Fishery and Pacific Andes Resources remain suspended while Pacific Andes has been delisted. 

Pacific Andes: Annual Report, 17 Jul 2008