Two Chinese directors step down from Blue Diamonds board

Two directors of Blue Diamonds Jewellery Worldwide PLC (BLUE) have resigned in the midst of investigations into the company by the capital market regulator the Securities and Exchange Commission (SEC). Chinese nationals Yang Chong and Guo Wei, who had joined at the start of the 2014 financial year when the current Chairman Xia Liqiang became the largest shareholder of the company, resigned last week.

A stock market filing said the two directors held no shares of the company as at June 6, 2016. Seven of the nine directors of Blue Diamonds Jewellery Worldwide are Chinese. An independent audit into the books of the company has found “several irregularities in the conduct of business affairs of BLUE by the management, which may point to possible misappropriation of public funds.” The shareholders of the company unanimously agreed to the audit at an Extraordinary General Meeting this January. The main purpose of the audit was to investigate the alleged misuse of Rs.165.25 million raised through a rights issue.

In view of the findings, the SEC said further investigations into the company had been initiated and measures would be taken to safeguard investor interests. Meanwhile, the SEC recently bar r ed paymen ts to BLUE Chairman Xia Liqiang over a share sale carried out before the results of the special purpose audit into the company accounts were announced.