China Huishan Dairy Holdings Co Ltd sunk deeper into crisis on Monday, saying it will miss a June deadline for publishing its full-year results as it faces “tremendous difficulties” getting a clear picture of its finances.
Huishan, which has $3.9 billion in debt, also said it would hire a forensic accountant to investigate the gaps in its financial statements, and continue to work with advisors and creditors to negotiate a possible debt restructuring plan.
The firm’s woes came to light when its stock plunged 85 percent on March 24 before being suspended. Since then most of its directors have quit, it has missed loan payments and lost contact with a key executive in charge of its finances and cash.
The murky picture of Huishan’s finances underscores growing concern amongst lenders and regulators about the risks of excess leverage and financial engineering in corporate China. Failure to file its results on time could also put the company at risk of being delisted.