April 10 China Huishan Dairy Holding Co Ltd
said on Monday courts in Shanghai ruled to have the
company's assets frozen, following an application by a creditor
of the troubled dairy firm.
The ruling is the latest blow for China's largest integrated
dairy firm after its shares were suspended from trading
following an 85 percent plunge in a single day last month.
The company has also missed loan repayments and lost contact
with a key executive in charge of its finances and cash.
China Huishan said Shanghai courts ruled to freeze assets
worth 546.1 million yuan ($79 million) of the company, its
controlling shareholder Yang Kai and his wife.
The ruling is in response to an application by Gopher Asset
Management Co Ltd, one of the company's creditors. A similar
application by Gopher was rejected late last month by a Hong
The diary firm also said on Monday it had received a letter
from lenders alleging non-compliance with conditions under a
$200 million debt facility. The lenders alleged that the company
was in default.
Huishan, founded in 2009, grabbed headlines last year when
it sold and leased back part of its herd, but its most recent
troubles have laid bare risks of excess leverage and financial
engineering in unexpected quarters of corporate China.
Huishan has been on the back foot since a December attack
by U.S.-based short-seller Muddy Waters.
($1 = 6.8988 Chinese yuan renminbi)
(Reporting By Justin George Varghese in Bengaluru; Editing by
Sai Sachin Ravikumar)