Chinese food retailer Winha settles case with ASX over delisting threat
Securities July 3, 2018 10:01 pm By Christine Caulfield | Melbourne

China-based food retailer Winha Commerce has settled legal action it launched against the Australian Stock Exchange over ASX’s threats to delist the company.

The settlement followed an interim injunction order issued by the Federal Court that barred ASX from following through with its threat while Winha’s case proceeded. Under the settlement, Winha will voluntarily relinquish its listing on ASX by September and apply for listing on the Sydney Stock Exchange.

Winha had told shareholders in late May that it intended to fight ASX’s delisting “and the decision making process” behind it. ASX hired Herbert Smith Freehills to represent it.

ASX spokesperson Matthew Gibbs confirmed the settlement on Tuesday, but declined to comment further. A lawyer for Winha did not respond to a request for comment on Tuesday.

ASX notified Winha that it would be delisted after issuing queries to all ASX-listed Chinese-based companies about problems they faced converting the remnimbi.

“ASX formed the view that it was appropriate to remove Winha from the official list and advised the company of such,” Gibbs said in late May.

Winha, which has been trading on the exchange since January 2017, told the Federal Court it planned to challenge ASX’s decision-making powers under the Administrative Judicial Review Act.

ASX suspended Winha’s shares from official quotation on November 30, two months after Winha issued a response to ASX’s query. ASX had sent the query letter to all 50 Chinese companies listed on the exchange, prompted by new Chinese government guidelines to curb offshore spending.

Former company secretary Justyn Stedwell told ASX in September that Winha had not “encountered any difficulties repatriating money or converting money into foreign currencies in accordance with applicable Chinese legal requirements”.

The company was also not aware of any changes to law in China that “generally prohibit repatriation of money outbound via conversion of RMB into foreign currencies”, he said.

In November, Winha issued its half yearly report, in which it said the Chinese government may, at its discretion, restrict access to foreign currencies for foreign account transactions.

“If changes to the foreign exchange control system prevents the company’s Chinese subsidiaries from obtaining sufficient foreign currency to satisfy their currency demands, they may not be able to pay dividends in foreign (no-RMB) currencies to the company,” the company told shareholders.

In December, ASX said the company’s shares would remain suspended “pending further enquiries by ASX”.

In March the company announced Stedwell resigned.

The case is Winha Commerce and Trade International Ltd v ASX Limited.

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Christine Caulfield

Christine Caulfield has been a journalist for 18 years. She was most recently the Co-Managing Editor at US legal news publication Law360. Prior to that she worked as the County Court reporter for The Herald Sun. She is Co-Founder and Editor of Lawyerly.