NZX's NZ RegCo launches investigation into QEX

The NZX has suspended trading in QEX. Photo / File

The NZX's regulatory arm, NZ RegCo, said formal investigations were under way into QEX Logistics on a number of matters relating to the company's compliance with listing rules and disclosure requirements.

NZ RegCo's chief executive Joost van Amelsfort said the investigation would look at the statement made by QEX yesterday regarding charges that were brought by the Ministry for Primary Industries (MPI) last November against QEX's trading subsidiary New Y Trading Ltd and QEX's chief executive Jinjie (Ronnie) Xue.

Van Amelsfort said the investigations were in addition to inquiries commenced by NZ RegCo in October 2020, in relation to disclosures on inventory that had been removed from QEX's secured China Customs bonded warehouse.

"Matters relating to corporate governance and continuous disclosure are enforcement priorities for NZ RegCo," he said in a statement.

Van Amelsfort said those priorities were "vital for ensuring the operation of fair, orderly and transparent NZX markets and supporting investor confidence".

NZ RegCo put trading in QEX shares into suspension on February 18 on the basis of QEX's breaches of its corporate governance requirements under the Listing Rules, as stated to the market that day.

On the same day, former Federated Farmers chief executive Conor English resigned from the board, along with Danny Chan and Martin MacDonald, citing differences with Xue, who is the company's majority shareholder and the sole remaining director.

MacDonald had been appointed independent director just days before his resignation.
On the same day, New Y Trading received notice from its first ranking security holder, Westpac, that it had breached its interest cover obligation to maintain an interest cover ratio of no less than 2.50 times.

On February 10 QEX advised that the company has appointed RSM Hayes Audit as its statutory auditor following the resignation of Deloitte as its external auditor.

In its latest result - for the six months to September last year - QEX turned in a $5.86m loss.

In November, the company said it was investigating missing inventory, presumed stolen, from a Shanghai bonded warehouse, worth $4.3m.

QEX listed on the exchange's then small-cap NXT in 2018.

Before its suspension, the stock traded at 28.5c, having fallen by 60 per cent over the previous 12 months.