05.03.2012

Tat Hong settles China dispute

Singapore based crane group Tat Hong has accepted a settlement in the fraud dispute involving its Chinese joint venture rental company, Jiangsu Zhenghe Tathong Equipment Rental Co (JZTH).

The dispute with its joint venture partner Beijing Zhongjian Zhenghe Construction Machinery Co., (BZZ) which owns 45 percent of the business to Tat Hongs 55 percent, concerned the mishandling of funds by JZTH ex-general manager, and receivables owed to the venture by BZZ.

JZTH has continued to operate as normal under a new general manager, following the removal of the previous manager, a nominee of BZZ, in July 2010 when the breach of fiduciary duties was discovered.

In addition to pursuing the ex-manager which is on-going Tat Hong also took action against BZZ and has now agreed to acquire its 45 percent stake for s$7 million – a 25 percent discount on the current asset value and roughly the sum owed by BZZ to the business, so no cash will change hands.