China Forestry Holdings Ltd. said Li Han Chun, its former chief executive officer, was detained by police in China for the alleged embezzlement of 30 million yuan ($4.6 million).
Li, replaced by Li Jian as CEO on Feb. 18, removed company files including sales documents of unit Kunming Ultra Big Forestry Resources Development Co., according to a China Forestry statement to the Hong Kong stock exchange today. Li Han Chun was detained by police in China’s Guizhou province on Feb. 24, it said.
Hong Kong Court of First Instance Judge Carlye Chu on Feb. 11 extended an order to freeze HK$398.2 million ($51.12 million) of assets held by the former CEO, who sold shares before the company disclosed accounting irregularities. Moody’s Investors Service put China Forestry’s debt on review for a downgrade on the share suspension in the city Jan. 26.
“The company is in the process of ascertaining the extent of documents taken away by Mr. Li Han Chun and is seeking legal advice as to recovery of such documents,” China Forestry said in the statement today.
The company is checking its current liabilities position, according to the statement.
The shares will remain suspended until further notice, the company said.
China Forestry Holdings Co. will be removed from the Hang Seng Composite Index from March 7 because of the company’s prolonged suspension, Hang Seng Indexes Co. said in a Feb. 28 statement.
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