SINGAPORE (May 26): Lawyers of Chen Wei Ping, Midas’ former executive chairman, have written to its board refuting allegations he had refused to answer questions related to unauthorised loans and corporate guarantees and undisclosed lawsuits involving the company.

In an April 6 announcement, Midas’ nominating committee said Chen was “not suitable to continue as an executive director of the group” since it had not receive any written response from Chen by that time.

In the letter attached to Midas’ Friday night filing, Drew & Napier said the assertions made against Chen in the announcement were incorrect and had sullied his reputation.  

Drew & Napier said the list of questions referred to was emailed to Chen on April 1. The following day on April 2, SGX issued a notice of compliance raising concerns about the suitability, character and integrity of Chen and executive officer Ma Ming Zhang to continue with their respective appointments in the company. Chen admitted he was also informed of the notice of compliance by director Dr Xu Wei Dong.

“Despite feeling aggrieved, our client agreed to resign from Midas,” said Drew & Napier in the letter revealed by Midas.

Drew & Napier said Chen then called Chief Financial Officer Liaw Kok Fong to inform him of his intention to resign and asked if he was still required to respond to the questions.

“Mr Liaw clarified that there was no necessity for our client to respond to the questions given that he had intended to tender his resignation from Midas,” stated Drew & Napier, before adding Chen was at “all material times willing and able to respond to the questions posed by Midas”.

“Our client is of the view that the assertions against him in the April 6 announcement do not present a complete picture and have caused, among others, damage to his reputation,” concluded Drew & Napier.

In its Friday night response, Midas’ board says its nominating committee has yet to receive any written response from Chen.

See: SGX RegCo says taking 'every step possible within its powers' to assist in Midas investigations

See also; Midas' board says company unable to operate as going concern; auditor Mazars says financial reports it issued no longer valid

See also: Midas says former exec chairman Chen Wei Ping under probe in China for fraud

See also: CAD launches investigations into Midas

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

In defence, executive director Tong Din Eu said although Chen was aware Midas’ board was in Changchun from April 10 to April 18 to meet with senior management of the subsidiaries to find out more information on the various undisclosed and unauthorised transactions, Chen “did not contact any of them”.

The board added it would be “most happy” to organise a shareholders’ dialogue session for Chen if he would like to meet the shareholders and respond to the questions for him.

In addition, the board said it has discovered additional irregularities since Chen’s resignation. These included missing cash from Jilin Midas Light Alloy Co related to its cash validation; the discovery of an undisclosed account at Bank of Jilin opened by Chen; the discovery of another undisclosed account at Jiao Tong Bank as well as the discovery of undisclosed and unapproved loans from lenders Zhou Shi Ping and Chen Gui Zhi.