Ding Sheng Xin Finance is hoping the ASX will accept ignorance as a defence after being pinged for an unpaid, long-promised dividend.

Earlier this month the ASX sent the Chinese financing company 12 questions and a detailed history of alleged broken promises since October 2016.

That 1c dividend was supposed to be paid on December 16 last year.

Ding Sheng Xin Finance (ASX: DXF) says it didn’t understand the rules around funds transfers out of China.

“The company now concludes that its understanding of what is required to obtain a transfer approval for a company of its nature is that it is considerably more onerous than the company understood it to be at the time of making the release,” Ding Sheng Xin said.

In a case of ‘buyer beware’, Ding Sheng Xin Finance outlined the myriad of processes it will now take to get shareholder money out of China.

Ding Sheng must deal with seven different regulators which each oversee multiple financing rules.

It has to submit a written application to transfer the dividend money to Australia, along with a foreign exchange registration certificate of foreign invested enterprises, a board resolution approving the payout, a certified capital verification report, and a full company audit.

Making matters even more complicated, Ding Sheng is involved in litigation in China.

In May lenders took subsidiary PRC DSX to court over the default of an RMB 21 million ($4 million) loan it had guaranteed.

This means regulators are scrutinising the company to make sure it’s not trying to move money out of China to avoid obligations at home.

Not only does that mean “the regulatory authority holds a very cautious attitude” to Ding Sheng Xin Finance transferring money to pay its Australian investors, or any Australia-based directors or employees who may have been expecting salaries.

Its last accounts in July show it had $64 million in cash. But because the company is domiciled overseas that doesn’t necessarily mean the money is in Australia.

The four largest shareholders own 71.3 per cent of the company, and the local chairman is Winton Willesee.

Mr Willesee is a familiar face at the smaller end of the ASX. He sits on the boards of Metallum (ASX:MNE), xTV Networks (ASX:XTV), MMJ Phytotech (ASX:MMJ) and Nanollose which expects to join the ASX in November.

The company hopes it will have the right approvals by October, and also hopes it will have its half year report done in six weeks.

Ding Sheng Xin Finance closed its note with a plea to please remember this is the first time it’s tried to get money out of China, and it truly expects that next time around it won’t be as hard.

Ding Sheng Xin Finance’s shares were suspended at 5c in August when it failed to lodge a half year report.

The company has been contacted for comment.