Suspended QEX loses second auditor in less than a month

Ronnie and Doreen Xue of QEX Logistics. Photo / Supplied

QEX logistics has lost its second auditor in less than a month.

The company said its auditor, RSM Hayes Audit, had resigned, effective from today.

RSM was appointed on February 10 after the resignation of Deloitte.

In a statement to the NZX today, QEX said RSM's resignation was due to:

• Media exposure regarding the company, including the investigations by the Ministry of Primary Industries and NZX Regulation Limited (NZ RegCo)
• The resignations of its independent directors and the company's non-compliance with the NZX Listing Rules.
• The suspension of QEX's ordinary shares from trading on the NZX.

QEX said the company is in discussions with potential replacement auditors.

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

Chief executive Joost van Amelsfort said the investigation would look at the statement made by QEX regarding charges that were brought by MPI against the trading subsidiary New Y Trading Ltd and QEX's chief executive Jinjie (Ronnie) Xue.

Van Amelsfort said at the time 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.

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.

At the same time, 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.

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 lost 47 per cent over the last 12 months.