The Aoxin audit committee has found “reasonable evidence” to suggest that Aoxin Q&M’s ex-group CEO Dr Shao Yongxin has obtained funds for his own personal use, according to an investigations update filed on Sept 8.
Shao announced his resignation from the Catalist-listed company which is a Chinese spin-off from mainboard listed Q&M Dental, on July 22, after a whistleblowing report was filed against him to the company’s audit committee.
Aoxin cited “differences in views and opinions” with its parent Q&M Dental Group, regarding the strategic direction of the dental business as the reason for Shao’s resignation.
The SGX Group issued a circular a day after, raising several queries about Shao’s resignation, including clarification on differences in opinion and matters between the ex-chief and the board of directors.
“The AC, upon receipt of the first whistle-blowing report and documents, commenced its preliminary investigations and initial fact gathering. Given that the whistle-blowing reports were received only a few days ago, internal investigations are still ongoing. The AC is currently in discussion with relevant professionals and official appointments are targeted to be made by next week,” reads Aoxin’s reply on July 25.
As at Sept 8, the audit committee has completed its investigations in relation to the whistleblowing reports.
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The reports alleged that Shao obtained funds amounting to about RMB2 million from the whistleblowers, by purporting to sell them 2.8 million shares in the capital of the company; and Shao had over the period between 2017 to 2022 obtained additional funds amounting in aggregate to approximately RMB13 million (including interest accrued and payable) from certain whistleblowers.
The audit committee says: “There is reasonable evidence to suggest, as alleged in the whistleblowing reports, that Dr Shao had obtained funds from the whistleblowers for his own personal use by purporting to sell the purported sale shares to the whistleblowers and taking the personal loans from the whistleblowers.”
This is due to the whistleblowers substantiating their allegations by providing copies of the share entrustment agreements that Shao entered into, and copies of the loan agreements.
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Shao also did not respond to email queries seeking clarification of the allegations raised, and instead, abruptly and unilaterally purported to resign from his office as executive director and group CEO.
Shares in Aoxin closed flat at 6.6 cents on Sept 8.
