The CEO / Chairman was forced to sell his 56% stake in the company from March to May 2009 as he defaulted on an outstanding debt of $65m. The change in the control of the company triggered the bondholder’s rights to convert or redeem S$149 million worth of bonds issued by the company. The company subsequently became insolvent.
A special audit was conducted by the statutory auditors (PWC) and found questionable cash transactions including a RMB66m payment for raw materials and RMB230m for investment in 4 separate waste power plant projects. The CFO was dismissed on grounds of misconduct and breach of duties. However, the dismissal of the CFO was done without consultation of the independent directors. The CEO and other members of management resigned from their executive roles to become non-executive directors in May 2009, but still retained control over the PRC subsidiaries and refused to assist with the special audit.
Trading was suspended from September 2009. The company was placed under Judicial Management from June 2010 and subsequently delisted.
Sino-Environment: Scheme Document, 10 Aug 2011
Sino-Environment: Annual Report 2008