SHAREHOLDERS of Best World International are unlikely to see the counter resume trading soon - at least not until it is able to make progress on its transition to a direct-selling model in China, the firm said in a regulatory filing on Tuesday.

 

Plagued by accounting problems, the mainboard-listed beauty products firm has had its shares suspended for about two years it believes the suspension won' t be lifted until it can assuage the concerns of the regulatory arm of Singapore Exchange, SGX RegCo, on the legality of its sales and distribution model in China.

 

However, it said that the Ministry of Commerce (MOFCOM) of China " has not resumed accepting applications for direct-selling licences and accepting filings for expansion of the coverage of existing direct-selling licences" .

 

The MOFCOM has furnished no update on this matter since December 2020. Consequently, Best World International is unable at this time to file for the expansion of the coverage of its existing direct-selling licence, it stated.

 

The company' s skin-care sale-and-distribution model in China and its financials came under scrutiny after short seller Bonitas Research questioned the authenticity and legality of its profits.

 

PricewaterhouseCoopers Advisory Services, in an earlier independent review of Best World' s China dealings, uncovered questionable deposits into the personal bank accounts of various individuals by its franchisees and other potential breaches of the Singapore Companies Act.

 

SGX RegCo noted that there was insufficient clarity on the actual financial position of the group and the legality of the business, including compliance with China' s regulations, so trading in the shares of the company cannot resume in a fair, transparent and orderly manner.