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DFM - Dongfang Modern Agriculture Holding News Story

A$0.83 0.0  0.0%

Last Trade - 07/06/19

Sector
Consumer Defensives
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £130.5m
Position in Universe th / 1899

Australia-listed China citrus firm says board quit after probe rumour

SYDNEY, July 19 (Reuters) - An Australia-listed Chinese
citrus grower said the abrupt resignations in June of its chief
executive and almost the entire board came after a rumoured
investigation of criminal connections to its plantations in
China.
    The firm, Dongfang Modern Agriculture Holding Group Ltd
 DFM.AX , gave no explanation when the resignations occurred
last month but attributed them to the rumours in a letter to the
Australian Securities Exchange (ASX) late on Thursday. The
letter added that the rumours were false.    
    In the letter, Dongfang's lawyers said the company believed
two directors quit after hearing rumours that officials in the
southeast China city of Ganzhou interviewed staff and were
investigating "criminal connections".    
    "These rumours were not true," said the letter, which was
published by the ASX.
    "Because the independent directors could not investigate
this rumour for themselves by visiting the plantations they
tendered their resignation due to the seriousness of the rumours
even though the rumours were false."
    Those resignations prompted two more directors to quit and
then the CEO, Chiu So, "resigned also because he was seeking
another career development", the letter said. The company
secretary then also quit.
    Shares in Dongfang, which listed at A$1.06 in 2015, were
suspended in June after the resignations left them without a
sufficient number of directors. They last traded at A$0.83,
giving the firm a market capitalisation just below A$350 million
($250 million).
    Dongfang did not respond to an emailed request for comment.
Former CEO So said by phone the rumours were wrong, without
elaborating.
    "I have already resigned. Please contact the company to ask
for more information," he said. "I have nothing more to say."
    Dongfang is among dozens of small Chinese firms to list in
Australia in recent years, lured by the prospect of a simpler
public offering process and less volatility than markets at
home.    
    It was among more than 40 Chinese firms that the ASX wrote
to in 2017 asking whether China's crackdown on capital outflows
presents them any difficulties.
    Dongfang said it was actively looking for replacement
directors.
    The company said in March that it had sold more than 280,000
tonnes of fruit, including oranges and tangerines, in 2018, for
a net profit of A$84.4 and an operating margin better than 45%. 
  
($1 = 1.4140 Australian dollars)

 (Reporting by Tom Westbrook; Editing by Muralikumar
Anantharaman)
 ((tom.westbrook@thomsonreuters.com; +61466355340; Reuters
Messaging: tom.westbrook.thomsonreuters.com@reuters.net;
twitter.com/tswestbrook))
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