September 23, 2011 / 12:57 PM / 7 years ago

UPDATE 2-Zungui Haixi CFO, directors resign

* Co’s bank statements being probed after auditor warning

* Directors, CFO say CEO not cooperating with probe (Adds details on company comment, background)

Sept 23 (Reuters) - Zungui Haixi ZUN.V, a China-focused sportswear maker, said on Friday that its independent directors and its chief financial officer have resigned, complaining that CEO Yanda Cai was not cooperating with their accounting probe.

“In spite of numerous requests for cooperation, there has been no positive response from Mr. Cai,” the company said in a statement, adding that it was unclear whether the company would also help fund the investigation into auditor complaints.

Canadian-listed Zungui is one of a number of China-focused companies with North American listings to come under pressure after reports of accounting irregularities.

Its auditor, Ernst & Young, warned last month about inconsistencies in Zungui bank documents and regulators halted the stock on Aug. 23 pending an investigation by Canada’s top securities regulator, the Ontario Securities Commission.

The company, which sells athletic footwear, apparel and other accessories in China, said in August its audit committee would address the matter via an independent investigation. But, last week, the company warned that its Cai and other insiders were not cooperating with the probe.

Zungui was founded in 1992 and opened its first store nearly a decade later, in 2001. It listed its shares on Canada’s small-cap TSX Venture Exchange in 2009 and owns more than 2,000 retail stores in China, according to the latest company presentation on its website.

The company’s stock, which has fallen nearly 90 percent this year, was halted on Aug. 23 at 34 Canadian cents a share. (Reporting by Euan Rocha; editing by Janet Guttsman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below