SINGAPORE (Apr 24): The board of Midas Holdings has received two letters of demand dated Mar 9 and Apr 16, bringing to light another two loan guarantees that the group does not know about.

These are the latest in a string of unauthorised loans taken out by the group’s China subsidiaries, which have prompted investigations by Singapore’s Commercial Affairs Department (CAD).

See: Midas CEO Patrick Chew quits; stamp was used without his approval to take out loans

See also: Midas uncovers yet another unauthorised loan

See also: Jilin Midas Aluminium Industries put under judicial management

The first letter dated Mar 9 referred to a finance lease agreement signed on Jul 22, 2016. This was entered into by Midas’ wholly-owned China subsidiaries, Lessee Luoyang Midas Aluminium (LMA), Jilin Midas Aluminium Industries (LMAI) and Jilin Midas Light Alloy (JMLA); Lessor Fengshui Leasing; former executive chairman Chen Wei Ping; Beijing Wei Bao Shi Jie Investment; and the group.

According to the letter, as LMA failed to repay overdue rental charges, Fengshui Leasing is demanding immediate payment for the outstanding rental amount and accrued interest amounting to RMB 87.3 million ($18.3 million).

The board noted that JMLA had provided the guarantee without informing the group. Chen had also extended a guarantee in his personal capacity without informing the group when he was still the chairman.

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

The second letter dated Apr 16 referred to a financing agency agreement signed on Apr 1 and entered into by Dalian Huicheng Aluminium, CRRC (Hong Kong) Co. and the group.

Under the agreement, CRRC had acted as Dalian Huicheng’s agent to sell aluminium alloy plates to Newport Metals, with the group liable for any delayed payment from Newport with liquidated damages incurred.

According to the second letter, Newport failed to repay for 13 overdue sales transactions. CRRC then requested the group to pay the outstanding amount and liquidated damages totalling US$6.9 million ($9.12 million) within seven days from Apr 16.

Shares of Midas have been suspended since Feb 8. They last traded at 19.2 cents each.