CHINA Asean Resources Limited will receive a 4-million- yuan (US$593,000) settlement following an ownership dispute over its Chinese medical equipment subsidiary.
The firm – which owns two logging concessions in the Kingdom – will receive the settlement in two stages, expected by September 31, ending an ownership dispute which began some three years ago, according to a company report.
China Asean claims its 65 percent share of subsidiary Sinnowa Medical Science and Technology was sold off to Innova Science and Technology Company and Great Profits Enterprises Limited without permission in November, 2007.
“The company has denied that the execution of the two unauthorised sale and purchase agreements was duly authorised,” it said.
The 2007 sale price of the 65 percent stake had been 14 million yuan, but China Asean chairman Alan Leung said the firm’s lawyers had advised the firm to accept the 4 million-yuan settlement offer.
“To continue with the case, we could be waiting for an outcome for years to come, as well as incurring significant additional legal costs,” Leung wrote yesterday.
Meanwhile, China Asean’s shareholders will decide at a special general meeting next month whether to proceed with the acquisition of a third forestry concession in Cambodia’s Kratie province. Under the deal up to 73.77 percent of the firm could come under control of two British Virgin Islands enterprises, in order to shore up its finances after suffering an approximate 99 percent decrease in turnover in 2009 compared to 2008.
Originally operating as Medical China Limited, the firm changed its name one day before the date of the “unauthorised sale” on 10 November 2007, to China Asean Resources partly to reflect its entry to Cambodia, according to a previous statement.
“The change of company name is to signify the Company’s future business expansion in the resources business in Cambodia and the PRC,” it said previously.