SINGAPORE (Mar 22): The corporate governance mess at Midas Holdings has claimed its first casualty, right at the very top rung of management.

See: Midas CEO says shares and money in China subsidiaries and associates frozen by courts

In a filing to the Singapore Exchange on Thursday night, Midas said CEO Patrick Chew Hwa Kwang has resigned with immediate effect due to "his health and litigation matters".

Chew had led the aluminium parts manufacturer since its listing in 2004, turning it into a former high-flying stock.

See: The golden opportunities that lie ahead for Midas

As the board looks for Chew’s replacement, Tong Din Eu, an independent, non-executive director, has been appointed the authorised representative of the company to handle its affairs.

In an earlier filing, Midas also revealed that executive chairman and largest shareholder Chen Wei Ping did not disclose to the board that he was being sued in China court by a money lender.

The company also provided more details of the loans and lawsuits involving Midas' subsidiaries and associate companies in China which the board claimed to have no previous knowledge of.

In one case, a money lender, Jilin Provincial Micro Refinancing Corporation, initiated a series of civil suits against the various Midas subsidiaries and associates on Dec 7 2017 to recover RMB 379 million ($79 million).

The money, issued in two separate tranches at interest rates of 15% and 10% pa, were supposedly for the repayment of loans earlier taken with a Chinese bank. Executive chairman Chen was one of the guarantors of the loan.

Midas said Chew's stamp was used to authorise the bridging loan without his consent.

In another case, Midas unit Luoyang Midas acted as the guarantor for a loan taken by Chongqing Huicheng Aluminium (CQHC), a company unrelated to Midas but owned by Chen Chen, a nephew of chairman Chen.

A machinery distributor is suing CQHC to recover some RMB 4 million.

A third case involved one Ning Xiao Fei, who is suing to recover loans of RMB 30.5 million and interest of RMB 10 million. The borrower was supposedly unit Jilin Midas Light Alloy Co.

In both the second and third cases, Chew’s legal stamp was again used without his knowledge.

“The Audit Committee will issue further announcements as appropriate, as and when there are any material developments in the matter,” says Midas.

Signs of trouble at Midas began last November when its shares crashed by half. The company then cited reports of slowdown in China’s railway expansion as a possible reason for the drop.

See: Has Midas been derailed by China's alleged crackdown on local infrastructure spending?

The legal problems in China were announced on Feb 8. Shares of Midas, suspended since then, last traded at 19.2 cents.

Midas has obtained approval from SGX to report its earnings for the fiscal year ended Dec 31 2017 by Jun 28 and to hold its annual general meeting by Aug 27.