Oceanus suspends trading over ‘abnormal deaths’ of abalones; Oceanus operates the Ah Yat Tian Xia chain of restaurants, with outlets in mainland China, Hong Kong, Taiwan and Singapore

Oceanus suspends trading over ‘abnormal deaths’ of abalones

Thursday, Aug 15, 2013

Jonathan Kwok

The Straits Times

CHINA – Abalone producer Oceanus Group has suspended trading of its shares after it received a report of unnatural deaths of its abalones in China. An announcement by the firm on Sunday evening also made reference to an executive director who was recently forced to step down from the board but remains as a key manager. The statement did not link the reports of abalone deaths with the executive director’s departure except to say they had happened at around the same time. Mr Wu Yong Shou had stood for re-election at the Oceanus annual general meeting on July 31. But the motion was defeated by a 95.51 per cent majority of the shareholders present and voting – so he had to step down as an executive director.But Mr Wu still serves as the general manager of Oceanus’ China subsidiary, Oceanus (China) Aquaculture, which is tasked with managing the firm’s overall production and operations in China.

“He (Mr Wu) became increasingly uncooperative towards the re-constituted board ever since he was not re-elected as a director of the company…” said the Oceanus announcement.

Oceanus was notified on Aug 2 and again on Aug 5 by its head of production, of “substantial and abnormal” deaths of abalones at its China farms within a very short span of time.

The deaths started the day after the annual general meeting when Mr Wu lost his board seat, said the company.

Oceanus said its board had been unable to obtain verification of the abnormal deaths from the group’s finance team.

“In view of the circumstances leading to receiving such a report (of the deaths), and the lack of verification of such mortality from the finance team, the company decides to request a trading suspension of the shares of the company, to ensure that shareholders and public investors are not trading on an incomplete set of information,” said Oceanus.

It said the board is carrying out “all necessary investigations” to look into the situation.

The firm said it is committed to updating shareholders on the matter by the end of this month, and will seek to lift the trading suspension as soon as it is appropriate, without compromising on the interests of shareholders.

Oceanus shares had been halted since last Monday, pending the release of an announcement.

But a halt can last for a maximum of only three market days. Companies that wish for trading to be stopped for longer periods typically apply for the halt to be converted to a suspension, as Oceanus has done.

The stock last changed hands at 2.7 cents on Aug 2.

Oceanus is a holding company originally listed in Singapore in 2008 via a reverse takeover of TR Networks.

Oceanus’ two main business segments are aquaculture production and abalone processing and distribution. It also operates the Ah Yat Tian Xia chain of restaurants, with outlets in mainland China, Hong Kong, Taiwan and Singapore. Ah Yat Tian Xia’s food offerings include abalone-based meals.

Oceanus had not responded to The Straits Times’ queries for additional details by 9pm last Monday night.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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