SINGAPORE (May 4): Tong Din Eu, executive director of Midas Holdings, told anxious shareholders this past week that the company’s former executive chairman Chen Wei Ping had promised, during a Feb 1 conference call, to make arrangements with the Liaoyuan government to settle previously undisclosed litigation that auditors had uncovered.

See: Midas likely to go bust if creditors push for liquidation; board aims to salvage parent company

That was just a week before the train parts maker announced the discovery of the litigation proceedings to the market. Chen, who is at the centre of the unauthorised loans and guarantees, has since been booted off the board of Midas at the behest of the Singapore Exchange.

See also: SGX strips Midas chairman Chen and legal representative Ma of their appointments

Tong, together with Midas’ current non-executive chairman Chan Soo Sen, also laid out the likelihood and extent to which the public-listed company itself would be liable for any of the unauthorised loans and guarantees.

Moreover, Tong hinted that the company’s China-based operating units that were involved in the unauthorised loans — and that is now under judicial management — might ultimately end up being taken over by other parties. That would effectively leave Midas as little more than a corporate shell with listings in Singapore and Hong Kong.

Find out more about the legal troubles facing Midas and the group’s possible actions towards the situation in this week’s issue of The Edge Singapore (Issue 829, week of May 7), on sale now at newsstands.

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