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EcoGreen International Group Limited, (formerly EcoGreen Fine Chemicals Group Ltd) was an investment holding company principally engaged in the production and trading of fine chemicals from natural resources. The products were used in aroma chemicals and pharmaceutical products. The company operated its business through three segments: Scent and Taste segment, Naturals segment and Specialties and Others segment. The company operated its business in Mainland China, Europe, Asia (excluding Mainland China) and North America.

EcoGreen Fine Chemicals Group Ltd started trading on the Hong Kong Stock Exchange (HKEx) in March 2004 and raised HK$138m in its IPO. The manager of the offering was Goldbond Securities Ltd. Additional share offerings in October 2005 and November 2017 raised HK$212.34m: (i) 5-Oct-05: HK$59.34m, (ii) 10-Nov-17: HK$153.00m.

In February 2015, EcoGreen Fine Chemicals Group Ltd changed its name to EcoGreen International Group Ltd.

On 29 March 2022, EcoGreen announced a delay in the release of its 2021 annual report. The reason given was, that due to COVID-19 there was difficulty in gathering the required documentation, bank confirmations etc during the auditing process.

On 30 March 2022, the company released its unaudited 2021 results.

On 4 April 2022, the company requested a halt in the trading of its shares on the HKEx pending a company announcement.

On 7 April 2022, EcoGreen announced a further delay in the publishing of its annual report. The auditor had requested further documentation from the company. The auditor had received bank confirmations showing that the company had a total bank balances of RMB160k as of 31 December 2021. However, according to the company accounts the bank balance should have been RMB1.58bn. An independent investigation committee, comprised of the independent directors, was set up to look into the issues.

On 3 May 2022, Han Huan Guang, executive director, senior VP - group strategic investments and capital markets, member of remuneration committee and nomination committee, resigned. Han alleged that, since the incident of bank balance discrepancy, he had made effort to advise the Board on the next step action and made suggestions under the Code on Corporate Governance of the Listing Rules but despite his repeated requests, the management team did not respond by taking remedial actions to facilitate the performance of his duties as a director. Han came to the conclusion that he did not have the support and understanding of the company and the management team, and he could no longer discharge his duties as an executive director.

On 6 May 2022, all three independent directors resigned; Yau Fook Chuen, Wong Yik Chung John and Xiang Ming. In their resignation the directors alleged that:

1. with regard to the bank balance discrepancy, no explanation for the incident was given by the executive directors despite their repeated enquiries;
2. the investigation committee lacked the cooperation of the executive directors on the engagement of professional parties, causing obstruction in the commencement of the investigation works;
3. the board decided matters by way of majority votes, causing delay in the publication of information and failure in publication of working progress of the investigation committee; and
4. the executive directors were engaged in working with creditors in the past month, but the resigned directors did not have sufficient time and information to review to discharge their directors’ duties to vote, delegate and supervise.

The company denied the allegations of the independent directors. It also said it had withdrawn its vote of confidence in John Wong, who it had supported in 2019 when the SFC alleged that Wong breached his duties as a director of another listed company.

On 27 May 2022, Lam Kwok Kin resigned as financial controller and company secretary, for personal reasons.

On 26 August 2022, Lin David Ying Tsung resigned as Senior VP and executive director, due to his desire to retire and devote more time to his personal endeavours.

On 4 May 2023, PricewaterhouseCoopers (PwC) tendered its resignation and resigned as the company's auditor. PwC, in its resignation letter highlighted a number of issues that it believed should be brought to the attention of shareholders and creditors. They were:

• In the letter dated 6 April 2022, PwC informed the audit committee that there were six bank confirmations circulated and received by PwC that were in agreement with the Group’s books and records. However, PwC subsequently conducted telephone enquiries with the bank confirmation processing department of the relevant bank and was informed by the bank that it had no record of receiving nor responding to the original six bank confirmations. PwC requested for management’s explanation, arranged to re-send the bank confirmations and requested for relevant banks records and other supporting documents. PwC subsequently obtained six new bank confirmations in person. The aggregate bank balances for the new confirmations was only approximately RMB160k, which was significantly different from the aggregate bank balances of approximately RMB1,58bn according to the group’s books and records and the original bank confirmations,
• PwC requested the management to provide further information, explanation and supporting documents for the differences. PwC had also requested the company to form an independent committee to investigate the issue and to hire an independent professional adviser to assist.
• During the first quarter of 2023, PwC continued to communicate with the investigation committee, which included proposing to observe certain interviews to be conducted by the Independent Adviser. According to PwC, the committee updated PwC several times that the investigation was on-going but no findings had been shared with PwC and PwC had not been informed of the final scope of the Investigation nor its progress and results.
• The company requested PwC to provide a work plan and time frame to complete the 2021 audit. PwC informed the company that it could not do so until it got the results of the investigation.
• On 28 April 2023, PwC was asked by the company to resign as the company’s auditor. EcoGreen said that cost effectiveness as well as timeliness in the completion of the audit of 2021 financial statements were important considerations and the company wanted to complete the audit ASAP. PwC agreed to resign as it could not complete the audit without the investigation results.

The company appointed Baker Tilly HK Ltd. as its new auditor to replace PwC.

On 19 October 2023, EcoGreen released the key findings of the investigation committee. The findings included:

• On 6 April 2022, the company said it had suffered a cyber-attack. It was a Ransomware attack where all the treasury department files and the financial & accounting (F&A) department files were encrypted. This included the 2021 account books given to PwC for audit work. However daily operations were not affected. Note this was the same day as that PwC had sent the letter about the bank confirmations. The company did not receive any ransom request. Also, the company had no data backup of the files.
• Part of the company’s emails and the OA System were encrypted during the ransomware attack, including the emails and OA System records of the F&A department and the treasury department.
• As a result, the company had to re-construct, based on the manual vouchers and departmental transaction records, its accounting books prior to the ransomware attack.
• The independent investigator obtained bank confirmations which agreed with the reconstructed financials. They also agreed with the bank confirmations that PwC obtained showing RMB160k in the accounts; significantly different from the aggregate bank balances of approximately RMB1.58bn according to the original confirmations.
• The two officers, in the accounts department, responsible for bank reconciliation had resigned in June 2022 and were uncontactable. These officers, plus an officer from the treasury department had provided the original banks confirmations to PwC. The treasury department officer had also resigned and could not be contacted.
• The investigation compared the 2021 unaudited annual results published on 30 March 2022 and the re-constructed accounting books. The re-constructed accounts showed a bank balance of RMB74m, 96% different to the 2021 unaudited results. Differences were noted, among others, in revenue, cost of goods sold and gross profit for FY2021 between the re-constructed accounts and the 2021 unaudited results. However, as the company was unable to provide the data source of the 2021 unaudited results, the investigator was unable to identify the reason for the differences.

On 7 November 2023, the company announced that it had received a letter from HKEx rejecting its request for an extension on the resumption of trading deadline and HKEx would cancel its listing from the 10 November 2023. EcoGreen applied to the HKEx Listing Review Committee for a review of the decision.

On 17 January 2024, independent directors, Choi Wai Hong, Clifford (chairman of audit committee) and Wang Jin (chairman of remuneration committee) resigned.

On 13 March 2024, independent director, Chui Man Lung, Everett, resigned.

On 19 March 2024, EcoGreen announced that the LRC, on 11 March, notified the company that it had upheld HKEx's decision to cancel the company's listing. EcoGreen decided to challenge the decision and applied to the Hong Kong High Court to review it. HKEx said it would refrain from implementing the delisting decision pending the high court outcome.
 

EcoGreen International Group: Delay in 2021 Annual Results, 29 Mar 2022
EcoGreen International Group: Unaudited 2021 Results, 30 Mar 2022
EcoGreen International Group: Further Delay in 2021 Annual Results, 7 Apr 2022
EcoGreen International Group: Executive Director Resignation, 3 May 2022
EcoGreen International Group: Independent Directors Resignation, 6 May 2022
EcoGreen International Group: Change of Auditor, 4 May 2023
EcoGreen International Group: Key findings of Investigation, 19 Oct 2023
EcoGreen International Group: Decision of the Listing Committee, 7 Nov 2023
GMT Research: EcoGreen International Group – AGS FY 2020
EcoGreen International Group: 2021 1H Report; PE Jun. 2021
EcoGreen International Group: Annual Report – YE Dec. 2020
EcoGreen International Group: Annual Report – YE Dec. 2019