Foreland Fabrictech

symystique: Any update on yr activist efforts?

Hi pine,

There has been progress on this case. Please mail me with your personal details on forelandfabrictech@gmail.com and I shall send you the latest status updates.

I would also appreciate if you could let me know your stake in Foreland.

Regards,

Foreland has finally appointed an Independent Reviewer for the decisions management had taken in early 2014. Looks like SGX has been able to make Mr. Tsoi see some reason.

infopub.sgx.com/Apps?A=COW_CorpAn...MVin0eUdqU

More about the reviewer BDO LLP can be found below:

www.bdo.com.sg/

We were pressing for one of the Big Four firms to do the review. Guess we will have to make do with No. 5.

Thoughts from fellow shareholders of Foreland are most welcome!

Isn't the money gone already? What can a review do to bring it back?

There were two things that had happened:

1. Almost the entire cash balance of the company was paid out as damages to a customer.

2. The land and production facilities of the company were impaired by an amount of RMB 246 million in the annual report. At least if this can be reversed the NAV of the company should go back to its rightful figure of 10+ cents from the current 3.5 cents.

Can the cash balance which was very easily paid out as damages to the customer be recovered? Only time will tell...

It's just a way to legally write-off the non-existence cash without getting into trouble with the law. This has happened to a quite a number of s chips listed on SGX and it is getting way too common. I do not see the reason why these s chips often put all their cash into the china subsidiaries instead of under the Singapore's company when most of the time, these subsidiaries are not going to use all the cash at the same time. By putting all the cash in the subsidiaries, there are huge risk of management running away with the money or sued by some so called customers seeking damages that are often many times more than the sales value. If the cash are kept with the parent co, when such cases of lawsuit seeking huge damages arises, they can just wind up the affected subsidiaries instead of paying out huge compensation in cash. Another way to prevent such cases from happening, the company can have 2 legal entities, 1 which hold the cash, PPE and doing the production, then sell to the other legal entity which will then sell to the 3rd party. Earnings from the selling entity will be returned back to the parent co in the form of dividend every year. This will help to shield the main entity from the lawsuit which makes more sense than outright giving millions of cash away.