GS Holdings says it has issued letters of demand (LOD) dated Oct 17 to Zhang Rongxuan and his company Kaifeng Jufeel Biotechnology for the outstanding debt of RMB98.6 million ($18.5 million) to the company. The debt was guaranteed by Zhang and Kaifeng Jufeel.
“Should Zhang and/or Kaifeng Jufeel fail to respond to the letter of demand within 21 days [till Nov 7] of the date of the letter of demand, or that any new settlement proposal made by Zhang is unsubstantiated with evidence of his ability to settle the debt, the board will contemplate initiating legal action against Zhang and/or Kaifeng Jufeel on the advice of the legal advisers of the company,” says GS Holdings 43A in its Oct 17 statement.
Due to the debt owed to GS Holdings, Zhang, who is GS Holdings’ non-independent and non-executive chairman, has been suspended from his duties.
Pang Pok, the company’s CEO and executive director, will take over Zhang’s duties as acting chairman.
In a separate statement, GS Holdings revealed that some RMB22 million held by its Chinese subsidiary, Wish Health Management (Shanghai), has been retained by the Chinese authorities.
“The company will be engaging lawyers in China to obtain further information on the circumstances leading to such retention of funds, liaise with the relevant authorities and the bank officers on the matter and advise the company on the next steps to be taken in order to seek the release of the funds,” says GS Holdings.
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Shares in GS Holdings closed 0.2 cents higher or 3.08% up at 6.7 cents on Oct 17.
