Fijian Holdings in trade freeze over audit query

July 27, 2009 07:16:57 PM

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Fijian Holdings Limited (FHL) has been suspended from the South Pacific Stock Exchange (SPSE) after failing to respond to several queries by the exchange in relation to a recent audit report carried out following the suspension and reinstatement of three senior FHL executives, among them CEO Sereana Qoro.

SPSE chief executive officer Jinita Prasad said the suspension had nothing to do with last week’s announcement by FHL that it would no longer pursue its proposed but long-delayed $190 million acquisition of BP South West Pacific’s regional oil business because of difficulties with securing financing through offshore banks.

Prasad said the exchange’s concern was whether there was any material information revealed in the corporate governance audit “particularly concerning any breaches of corporate governance”.

The suspension did not necessarily mean that corporate governance breaches had occurred or that the report contained negative material information, she said.

Prasad said the exchange was only trying to maintain an orderly, transparent market.

‘Since the exchange is concerned that material information in the report may have been withheld from the market and since to date the exchange has not received a satisfactory response from FHL, the (SPSE) board has decided to take this step to ensure that all shareholders receive timely and accurate information and that an orderly market is maintained rather than a market driven by rumour and potentially ill-informed decisions,” said the SPSE CEO.

FHL CEO Qoro and chairman Isoa Kaloumaira were reinstated early this month at the directive of the Prime Minister Commodore Voreqe Bainimarama.

The corporate governance audit was launched at the beginning of July and the executives asked to go on leave for a week so the audit could take place.

Prasad said FHL was not obliged to release the full audit report to the SPSE, just any material information that shareholders needed to have.

Suspension of trading in FHL shares will be lifted as soon as the company addresses the SPSE’s queries.

FHL was notified of the suspension via a letter late this afternoon, and there had been no response from the company as yet, Prasad said.

FHL shares have been trading at $2.77.