22 Apr 2021

QEX Logistics delisting process begins, plans for third-party business sale

6:26 pm on 22 April 2021

Embattled shipping company QEX Logistics plans to delist from the stock market and become a private company again, after listing just over three years ago.

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Photo: Supplied / NZX

The company, which was put in a trading halt by the NZX in February when its independent directors resigned en masse, said delisting was a necessary step to deliver the best possible outcome for its shareholders.

"QEX appreciates that the trading suspension and negative publicity surrounding the company in recent months has caused a high level of uncertainly and it is focused on achieving an outcome that is in the best interests of all shareholders," the company said in an announcement to the market.

The move was subject to approval from the market operator and shareholders.

"If the delisting proceeds, a process will be undertaken to prepare and position the group for a third-party business sale," the company said in an announcement to the stock exchange.

The announcement followed a trying six months for the company, which primarily ships online baby formula purchases to China.

The difficulty began last October when about $4 million worth of stock was lost from a bonded warehouse in Shanghai and was unlikely to be covered by its insurance.

This led the company to report a $4m half-year loss.

In mid-February, the company's independent directors resigned after the firm failed to meet its debt repayments, and cited issues with chief executive Ronnie Xue.

That action caused stock exchange regulator NZ RegCo to suspend the firm's trading until it found replacements.

The next week, the company revealed the Ministry for Primary Industries (MPI) had brought charges against the firm in November for allegedly breaching the Animal Products Act.

MPI said Xue and its trading subsidiary had attempted to export milk powder and honey without making necessary declarations.

The charges carry maximum penalties of $100,000 for the chief executive and $500,000 for the subsidiary.

Matters went from bad to worse a week later when NZ RegCo confirmed it was looking into a number of matters relating to the company's compliance with listing rules and regulations around continuous disclosure.

Last month, the company's chief financial officer Lin Zhuo and its auditor RSM Hayes Audit resigned.