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Shipbuilder JES has ‘ceased operations and production’ amid ongoing woes

Shipbuilder JES has ‘ceased operations and production’ amid ongoing woes
Shipbuilder and engineering firm JES International Holdings has “ceased operations and production of its existing business” as it struggles with misplaced financial documents and restructuring of its subsidiary in China.

Singapore-listed JES announced on Thursday that it is “currently maintaining a skeletal staff (comprising of key executive officers, as well as key administrative and finance personnel and security) to run the group as part of its cost controlling process.”

The Chinese shipbuilder has been troubled by missing group paraphernalia since 2 July, but has managed to claw back administrative records and common seals of two of its subsidiaries, Jiangsu Eastern Heavy Industries (JEHI) and Jiangsu New Eastern Marine Engineering Equipment Co (JNEME).

The group is still in the process of replacing the rest of the missing group paraphernalia of Jiangsu Nereus Shipyard, JYJJP Eastern Shipyard Supplies, and Jingjiang Eastern Heavy Steel Structure Co.

JES believed that the paper financial records of its subsidiaries are currently in the possession of the JX Associates, a term the company uses to refer to the relatives of Jin Xin, former chairman and ceo of JES.

In an earlier announcement, JES has taken legal action against its former administrative officer Ju Li Li for allegedly removing the group paraphernalia, and is considering taking legal action against the JX Associates. Ju is believed to be one of the associates of Jin as she absconded with the group paraphernalia follwing the resignation of Jin in March this year.

To complicate matters, Jin is the father of JES current ceo Audrey Jin Yu while her mother Chu Caixia was appointed as non-executive chairman in late-May, making the JES saga a family problem as well.

Meanwhile, JES also updated that there has been no progress on its appeal to the Jiangsu High Court on reversing a decision by Taizhou Intermediate People’s Court to reject the restructuring of JEHI.

JES said it has been advised by its lawyers that a decision by Jiangsu High Court is only expected by November 2015. In the meantime, JES has started talks with potential investors and its creditors on the restructuring proposal for submission to the high court in the event that the court decides in JEHI’s favour to restructure.

JEHI has sustained significant financial losses due to the decline in the shipbuilding industry as well as inadequate internal management. The yard is also impaired by a severe lack of liquidity and cashflow.