China Rerun Reaffirms Right to Seek Damages Over Unauthorized Statement

By Alex MacDonald

LONDON--China Rerun Chemical Group Ltd.(CHRR.LN) said it reserves the right to claim damages after an unauthorized regulatory statement that was issued last week led to the company's shares being suspended.

The company didn't disclose who issued the statement or whether it would seek damages. Neither the company in China or its representatives in London were immediately available for comment.

The unauthorized statement issued on Oct. 6 said its non-executive director Nick Lyth and nominated adviser Cairn Financial Advisers LLP had resigned with immediate effect after the board chose not to proceed with Cairn's request for an independent review as part of the group's ongoing systems and controls review. The company's shares were suspended as a result until the company is able to appoint a new advisor. If it fails to do so within a month of suspension, the share-listing will be cancelled.

China Rerun Chemical said Friday that neither Mr. Lyth, its former board member, or Cairn ever contacted the company about a review of its systems and controls since the company's shares were listed in 2013.

Furthermore, the company said it understands that the U.K.'s Alternative Investment Market, where the company's shares are listed, has contacted Cairn to inquire why China Rerun's 2014 results didn't disclose any qualified opinion or related party transactions. "We consider this is [Cairn's] negligent rather than our problem," China Rerun said.

Lastly, the company said the Board didn't reject the request for an independent review and would never reject any system improvement as long as it is reasonable and necessary. China Rerun said it only received Cairn's request on Oct. 1 to appoint an independent reviewer by Oct. 5. It noted that this was during the Chinese national new year holiday period. The company also said that Cairn has requested extra fees from the company.

"We reserve the right to claim any damage of our business and reputation," the company said.

Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

October 09, 2015 04:29 ET (08:29 GMT)

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