Two Australia-listed Chinese ag companies investigated after abrupt mass resignations

July 19 , 2019

The Australian bourse said earlier today that it has launched an investigation into the mass resignations of directors at two Australia-listed Chinese agricultural companies, in one case, over a rumored probe of criminal connections to its plantations in China, says Reuters.

One of the firms recently seeing directors step down is citrus grower Dongfang Modern Agriculture Holding Group Ltd (DFM.AX), which saw abrupt resignations of almost its entire board in June.

Dongfang reportedly had given no explanation when the resignations occurred, which also included its CEO and company secretary, but attributed them to the rumors in a letter responding to the exchange’s queries late on Thursday.

The letter added that the rumors were false.

“There are similarities with the query letter sent to another Chinese company recently,” Reuters quoted Australian Stock Exchange (ASX.AX) spokesman Matthew Gibbs saying in a statement.

He pointed out that Bojun Agriculture Holdings (BAH.AX), a manufacturer of processed fruit products, was the second company being investigated.

Bojun Agriculture told the exchange in a letter on Tuesday that its two Australian directors and company secretary had resigned following the departure of its auditor in June last year. It claimed the resignations had been over "miscommunication" between directors.

Regardless of the provided reasons, the abrupt departures at both companies have raised corporate governance questions, says the publication.

They've also cast a cloud over the practice of numerous Chinese companies seeking listings in Australia in order to avoid regulatory hurdles at home, it adds.

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