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SINGAPORE, March 12 (Reuters) - Chinese-based education provider Oriental Century (ORNL.SI) said on Thursday its chief executive Wang Yuean "substantially inflated" the company's balance sheet for its 2008 full year financial results.
The company requested trading in its shares to be suspended and said in a statement to the stock exchange that Wang has tendered his resignation as executive chairman, director and chief executive of the company.
"The Board was informed by Mr. Wang that the cash and cash equivalents ... reported on the Group's balance sheet set out in the unaudited financial statement for the year ended 31 December 2008 ... was substantially inflated," the statement said.
The company, which has a market capitalisation of $17 million, said its total cash and cash equivalents stood at 234.3 million yuan ($34.26 million) as of Dec 31, 2008.
"Mr. Wang had over the years inflated sales and cash balances and had diverted unspecified sums to an interested party. He alleged that he had made up fictitious accounting and related records to lead the directors, the chief financial officer and the auditors to believe that the cash were in existence."
Reuters was unable to immediately contact Wang.
The company also said its board of directors is concerned that the group's ability to operate as a going concern may be in doubt, pending clarity on its financial situation, and that the departure of its CEO could have a material adverse impact on the group's operation unless a suitable replacement is found.
Shares in Oriental Century have fallen 28 percent so far this year and ended at 15.5 Singapore cents on Monday. The company had requested for a trading halt late on Monday.
Singapore's Raffles Education (RLSE.SI), which holds 29.9 percent of Oriental, said in a statement it is not materially affected by this development. Shares in Raffles Education fell as much as 19 percent but were up 8 percent by 0745 GMT. ($1=6.839 Yuan) (Reporting by Harry Suhartono; Editing by Neil Chatterjee and Anshuman Daga)
The company requested trading in its shares to be suspended and said in a statement to the stock exchange that Wang has tendered his resignation as executive chairman, director and chief executive of the company.
"The Board was informed by Mr. Wang that the cash and cash equivalents ... reported on the Group's balance sheet set out in the unaudited financial statement for the year ended 31 December 2008 ... was substantially inflated," the statement said.
The company, which has a market capitalisation of $17 million, said its total cash and cash equivalents stood at 234.3 million yuan ($34.26 million) as of Dec 31, 2008.
"Mr. Wang had over the years inflated sales and cash balances and had diverted unspecified sums to an interested party. He alleged that he had made up fictitious accounting and related records to lead the directors, the chief financial officer and the auditors to believe that the cash were in existence."
Reuters was unable to immediately contact Wang.
The company also said its board of directors is concerned that the group's ability to operate as a going concern may be in doubt, pending clarity on its financial situation, and that the departure of its CEO could have a material adverse impact on the group's operation unless a suitable replacement is found.
Shares in Oriental Century have fallen 28 percent so far this year and ended at 15.5 Singapore cents on Monday. The company had requested for a trading halt late on Monday.
Singapore's Raffles Education (RLSE.SI), which holds 29.9 percent of Oriental, said in a statement it is not materially affected by this development. Shares in Raffles Education fell as much as 19 percent but were up 8 percent by 0745 GMT. ($1=6.839 Yuan) (Reporting by Harry Suhartono; Editing by Neil Chatterjee and Anshuman Daga)
