Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
BEL GLOBAL RESOURCES HOLDINGS LIMITED百營環球資源控股有限公司
(incorporated in Bermuda with limited liability)
(stock code: 761) KEY FINDINGS OF FORENSIC INVESTIGATION IN THE FORENSIC REPORTReferences are made to the Circular dated 21 December 2007 and the announcements of the Company dated 6 May 2008, 27 June 2012, 12 July 2012, 30 January 2013, 10 May 2013,
4 December 2013, 14 August 2014, 7 November 2014 and 12 March 2015 respectively in relation to, among other things, (i) the Acquisition; (ii) the issue of Tranche 2 Bonds; (iii) allegation of issuance of Tranche 2 Bonds based on incorrect information; (iv) formation of SIC; (v) engagement of the Forensic Accountant to conduct forensic accounting review; (vi) completion of the forensic review; (vii) investigation carried out by the SIC; (viii) investigation carried out by the ICAC; and (ix) major findings of the forensic investigation.
Further to the above disclosures, the Board hereby announces comprehensive findings in the Forensic Report including (i) background of the issuance of the Tranche 2 Bonds and forensic investigation; (ii) investigation work conducted by the Forensic Accountant; (iii) summary of key findings set out in the Forensic Report; (iv) recommendations of the Forensic Accountant; and (v) action taken by the Company.
BACKGROUND OF THE ISSUANCE OF TRANCHE 2 BONDS AND FORENSIC INVESTIGATIONAs disclosed in the Circular, pursuant to the Acquisition Agreement, the Company would issue four tranches of convertible bonds (i.e. tranche 2 to 5 bonds) to the Vendors after the completion of the Acquisition in January 2008. One of the conditions for the issuance of each of the said four tranches of convertible bonds was that PT Aneka should supply to Bel Nickel after the completion of the Acquisition, the Quarterly Target Output of 250,000WMT of nickel ores produced from the Bunta Mine in each of the consecutive quarters ended 31 March 2008, 30 June 2008, 30 September 2008 and 31 December 2008, respectively, in accordance with the Master Supply Agreement.
PT Aneka had purportedly supplied a total of 257,166.75WMT nickel ores to Bel Nickel in the first quarter ended 31 March 2008 by 7 Deliveries. Bel Nickel had then purportedly sold all the said 7 Deliveries to three customers who asserted themselves being independent third
parties. In reliance on supply of the 7 Deliveries by PT Aneka, the Company issued the Tranche 2 Bonds to Elite Dragon and High Chance on 6 May 2008.
In December 2011, the Company received a report from an ex-management staff of the Group's major mineral resources operating subsidiary, stating that the quantity of nickel ore supplied by PT Aneka to Bel Nickel in the first quarter ended 31 March 2008 was less than the quantity stated in the QSS tabled in the May 2008 Board Meeting. The aforesaid report had raised the management's serious concern over the accuracy of the QSS and the genuineness of the recorded supplies of nickel ore from PT Aneka to Bel Nickel in the first quarter ended 31 March 2008.
On 10 July 2012, the Board resolved that the SIC be established to undertake investigation on the Subject Matter. The SIC's investigation revealed findings including but not limited to certain irregularities in connection with the 7 Deliveries, and malpractice of certain former management of the Company. The SIC was of the view that the Subject Matter was in breach of the Listing Rules and criminal activity might be involved. Since the SIC considered that further investigations were required, the SIC engaged the Forensic Accountant on 30 January 2013 to conduct further investigation into the Subject Matter.
INVESTIGATION WORK CONDUCTED BY THE FORENSIC ACCOUNTANTSet out below is the investigation work conducted by the Forensic Accountant:
conducted computer forensic imaging, data recovery and investigation of relevant electronic storage devices;
conducted search on the Vendors, PT Aneka and the relevant parties in the Acquisition;
conducted search on the suppliers and buyers in relation to the 7 Deliveries, including Changzhou Retuo, Jiangsu Huaigang, Glory Trade, New Profit, Gold Excellence, Cahaya, etc;
reviewed the Group's books and records, such as contracts, invoices, ledgers and shipping documents, in relation to the 7 Deliveries;
reviewed Bel Nickel's sales of nickel ores other than those related to the 7 Deliveries;
reviewed the SIC Report;
reviewed the witness statement from ex- and existing employees of the Group's mineral resources operation;
interviewed a number of senior management of the Group's mineral resources operation;
sent letters of confirmation to Bel Nickel's customers;
analysed the authenticity of the information contained in the QSS in relation to the 7 Deliveries;
established the sales flow in relation to the 7 Deliveries;
analysed the arrangement between Good Year and Bel Nickel;
identified the relationship among the involved parties;
identified the potential non-disclosed related parties transactions;
analysed the beneficial owners of the Tranche 2 Bonds;
evaluated the possibility and existence of a scheme to deceive the Group and its Shareholders; and
evaluate the possibility of potential fraud and/or impropriety on the part of any Director, staff or employee of the Group.
SUMMARY OF KEY FINDINGS SET OUT IN THE FORENSIC REPORTBased on the Company's records (including various agreements signed between Bel Nickel and its customers, delivery documents, settlement records, statements issued by PT Aneka and the QSS prepared by Bel Nickel), Bel Nickel had allegedly purchased a total of 257,166.75WMT nickel ores from PT Aneka in the quarter ended 31 March 2008 in seven transactions or deliveries. Bel Nickel had then purportedly sold all the said 7 Deliveries to three allegedly independent third parties, namely Glory Trade, Changzhou Retuo and Jiangsu Huaigang. Below are the detailed findings in respect of the 7 Deliveries as set out in the Forensic Report.
Records of the Company
Information from bill of lading or cargo receipt
Delivery
number
Date of
delivery
Quantity
(WMT)
Buyer
Supporting
documents
Shipper
Notify/
Receipt Party
Vessel
Port of
loading
Port of
Discharge
1st
5/2/2008
29,675.40
Glory Trade
Bill of lading
Good Year
Sichuan
Dayang
MV East
Sunrise 2
Bunta,
Indonesia
Beihai, China
2nd
20/2/2008
50,000.00
Changzhou
Retuo
Cargo receipt
N/A
Changzhou
Retuo
Stockpile
N/A
N/A
3rd
20/3/2008
16,207.35
Glory Trade
Bill of lading
Good Year
Norinco &
Fullmetals
MV Alma I
Bunta,
Indonesia
Zhanjiang,
China
4th
13/3/2008
39,319.00
Glory Trade
Bill of lading
PT Antam
Sinosteel
MV Oluja
Gee Island,
Indonesia
Nantong,
China
5th
18/3/2008
40,000.00
Changzhou
Retuo
Cargo receipt
N/A
Changzhou
Retuo
Stockpile
N/A
N/A
6th
20/3/2008
30,000.00
Jiangsu
Huaigang
Cargo receipt
N/A
Jiangsu
Huaigang
Stockpile
N/A
N/A
7th
28/3/2008
51,965.00
Glory Trade
Bill of lading
PT Antam
Sinosteel
MV Medi
Bangkok
Gee Island,
Indonesia
Zhanjiang,
China
The 7 Deliveries can be categorised into three major types as follows:
PT Antam originated transactions (i.e. the 4th and the 7th Deliveries) - the nickel ores were shipped from the port located at Gee Island, Indonesia by PT Antam on FOB basis;
Stockpile transactions (i.e. the 2nd, the 5th and the 6th Deliveries) - the nickel ores were allegedly sold on stockpiles basis at Bunta, Indonesia without deliveries; and
PT Aneka originated transactions (i.e. the 1st and the 3rd Deliveries) - the nickel ores were shipped from the port located at Bunta, Indonesia by Good Year on FOB basis.
The key parties involved in the 7 Deliveries
Good Year was incorporated in Hong Kong on 18 February 2000. The registered and paid up capital is HK$10 million. The major Shareholder was Bel Trade International Holdings Limited. The directors were Sy Tin Choy (elder brother of Stephen Sy), Sky Landmark (owned as to 50% by Sunny Sy and 50% by Sy Tin Choi) and Noble Regal Limited (50% owned by Sunny Sy). According to the books and records of the Group, Good Year acted as an agent for Bel Nickel to receive payments from customers and to pay its suppliers. Good Year had acted as the trading company of the nickel ore between PT Aneka and Chen Ping's company prior to the completion of the Acquisition.
Glory Trade was incorporated in Singapore on 18 July 2005 and had been struck off on 5 April 2011. Glory Trade's registered and paid up capital was 2.00 Singapore dollars. Tan Ai Kiow was the sole Shareholder and Director of Glory Trade. Glory Trade was the single major customer in the 7 Deliveries and was the buyer in four out of the 7 Deliveries (i.e. the 1st, the 3rd, the 4th and the 7th Deliveries). Glory Trade's purchases during the three months ended 31 March 2008 amounted to approximately HK$49 million which accounted for 53% of the total turnover of the Group's minerals resources operation for the year ended 31 March 2008. In the annual returns of Glory Trade for 30 June 2008 and 30 June 2009 filed on 2 February 2009 and 5 February 2010, respectively, it was declared in both annual returns that Glory Trade was dormant during the years ended 30 June 2008 and 30 June 2009, respectively. From the forensic review, evidence found suggested that Glory Trade was not an independent third party to the Group; instead it may be controlled by Stephen Sy or his family.
Changzhou Retuo was incorporated in Jiangsu, PRC on 4 June 2007. The alleged customer in the 2nd and the 5th Deliveries. The substantial shareholders of Changzhou Retuo included Chen Ping (45%), Xu Feng (22%) and Sun Canping (16%). Chen Ping is also the director and legal representative of Changzhou Retuo. Besides Chen Ping, it appears that Changzhou Retuo and/or its shareholders, including but not limited to Zhang Wenqiang and Xu Feng, had dealings with Stephen Sy in person.
Jiangsu Huaigang was incorporated in Jiangsu, PRC. The alleged customer in the 6th Delivery.
Gold Excellence was incorporated in Hong Kong on 18 May 2005. The forensic investigations revealed that Gold Excellence was a subsequent trader and/or involved in the alleged freight finance arrangement from New Profit for four deliveries out of the 7 Deliveries, i.e. the 1st, the 3rd, the 4th and the 7th Deliveries. Even though Gold
Bel Global Resources Holdings Ltd. published this content on 26 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 August 2016 09:49:03 UTC.
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