Shanghai: Shenzhen Stock Exchange has made an announcement in which it has denounced Sainty Marine for violations of information disclosure rules.
According to the stock exchange, Sainty Marine has been accused of not disclosing major risks in shipbuilding projects where it collaborated with Mingde Heavy Industry, not accurately reporting the progress of the project, and not disclosing major matters that might lead to huge losses. Five senior officials of the company have also been accused.
Sainty Marine has been working with Mingde Heavy Industry on a number of shipbuilding projects since 2012, and it has paid RMB2.81bn ($452m) in total for pre-payments since then despite Mingde Heavy Industry suffering losses in three consecutive years.
Sainty Marine reported a net loss of RMB403m ($64.9m) for the year of 2014, and the shipyard attributed the loss to operational difficulties due to the restructuring of Mingde Heavy Industry. The yard said it might face up to RMB2.94bn ($473m) in losses if the restructuring fails.
Sainty Marine is also facing the huge risk of not being able to collect repayments from its financing business, it currently has several ongoing lawsuits with debtor companies.