ASX continues to grill China Dairy over movements of alleged shadow director
Health & Biotech
Health & Biotech
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ASX continues to grill China Dairy over movements of alleged shadow director.
China Dairy has again defended itself over questions about an alleged shadow director in a continuing back-and forth with the ASX.
On December 11, the Hong Kong-based company (ASX:CDC) was suspended pending a response to ASX queries about its governance — and the presence of an alleged potential de facto director, Mr Xiaoran “John” Zhang.
At the time, the ASX said “it has been suggested to ASX that Mr Xiaoran ‘John’ Zhang, who is not a member of CDC’s board, is acting as a de facto director of CDC”.
China Dairy said it was all down to a misunderstanding by Mr Zhang’s PA, telling the market in two more responses that the PA had been adequately admonished.
“The company understands that Mr Zhang has since reprimanded his personal assistant regarding this oversight.”
The crux of the questioning is down to the filing of an email about the retirement of another board member — details of which the ASX is examining meticulously:
“The document evidencing Mr Zhang’s travel arrangements on 23 November was an e-ticket receipt for a 10.30am flight from Beijing to Guangzhou, which we understand takes 3 to 3.5 hours,” ASX compliance advisor Rupa Kapadia wrote to China Dairy on Tuesday.
“Mr Zhang would therefore have been available prior to 10am and after 2pm on 23 November for his secretary to communicate with him by telephone about the email.”
China Dairy maintained Mr Zhang was involved in the company in purely a consulting capacity between their Chinese subsidiary and Beijin Ruihua – a company in which Mr Zhang is a director.
In its most recent response, China Dairy confirmed Mr Zhang did not have sole signatory rights on its bank account in Hong Kong, but was regularly invited to attend board meetings as an observer.
The company says a decision to not pay a dividend was supported by 4 out of 5 directors, and was not because of Mr Zhang.
The raw and fresh milk manufacturer last traded at 6.6c, for a market cap of $48 million.
It listed on the ASX in April last year and raised $17 million in an IPO with an issue price of 20c.
In its last market update in September, the company was progressing its research and development into children’s milk specifically enhanced with vitamins fed into the cow fodder.
The shares have traded between 6.5 and 15c in the past year.