Far Eastern New Century Corporation (Stock code: 1402, hereinafter referred to as “FENC” or “the Company”) has operated its polyester and textile businesses in China in full accordance with regulations for many years. However, during the second quarter of 2021, the Chinese authorities audited the Company. Following this audit the Company was informed that some things were no longer in compliance with regulations concerning environmental protection, fire safety, equipment, taxation etc., and was given a deadline for improvements and a fine of RMB 36.5 million.
The involved companies quickly identified the necessary changes and improvements, 98% of which have already been made and the remainder of which will be completed by the end of the year. There has been no significant impact on the Company’s finances or business operations and financial penalties have been paid. Currently, the polyester and textile businesses in China are performing solidly and FENC will work hard to ensure that a similar situation will not happen again in the future.