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AsiaPhos subsidiary receives settlement agreement for inventory write-off

Bryan Wu
Bryan Wu • 2 min read
AsiaPhos subsidiary receives settlement agreement for inventory write-off
Executive director of AsiaPhos Ong Hian En. Photo: The Edge Singapore
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Sichuan Mianzhu Norwest Phosphate Chemical Co, a subsidiary of AsiaPhos 5WV -

, has received a settlement agreement of RMB106,225.70 ($19,831) from Almamet Shanxi Reagents Co on March 25.

In April 2023, a fire broke out at a Tianjin Xiaochun Logistics Co warehouse where both Sichuan Mianzhu and Almamet stored inventory, resulting in an inventory write-off for Sichuan Mianzhu.

In November last year, the AsiaPhos subsidiary filed a compensation claim against Almamet for losses and related expenses totalling RMB199,965.

Sichuan Mianzhu subsequently received a counterclaim of RMB14,043 filed by Tianjin Xiaochun in relation to storage fees at the same warehouse where the fire occurred.

Both the compensation claim and counterclaim were discussed at a court hearing on Nov 29, 2023.

On Feb 1, the People's Procuratorate of Dongli District, Tianjin, issued the “Decision Not to Prosecute” but held that Almamet was liable for the economic losses which resulted from the Tianjing Xiaochun warehouse fire.

See also: Arbitration award made in favour of Q&M Dental Group’s Malaysia unit

Tianjin Xiaochun and Almamet later reached an agreement with Sichuan Mianzhu for the subsidiary not to hold Tianjin Xiaochun liable for the losses. In return, Tianjin Xiaochun would give up its legal claim against Sichuan Mianzhu.

The settlement will be recorded as other income in AsiaPhos’ financial statements for the FY2024 ending Dec 31. It is not expected to have any material impact on the earnings per share or the net tangible assets per share of the company for FY2024.

Shares in AsiaPhos closed 0.1 cent lower or 12.5% down at 0.7 cents on March 25.

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