CSL - Directives by Bursa Securities

Kindly be advised that Bursa Malaysia Securities Berhad (“Bursa Securities“), in its exercise of its power pursuant to Paragraph 2.23 of the Main Market Listing Requirements (“LR”), hereby directs CSL:-

(i)     to have its 3rd Quarterly Report for financial period ended 30 September 2017 reviewed by its external auditor prior to its          issuance.

 The scope of the review shall take into account, but not limited to, the following:-  

(a)     Assess and verify the material litigations involving CSL's subsidiaries, namely Sakura (Fujian) Packaging &               Stationery Co., Ltd, Sakura (Fujian) Plastics Enterprise Co., Ltd and Ruiyuan (Fujian) Enterprise Co., Ltd and ascertain its financial impact to the Company;

(b)     Verification of CSL’s existing cash and bank balances; and

(c)     Verification of CSL’s trade, other receivables and revenue.

(ii)   to have the advertisement expenses amounting to RMB146.2 million for financial year ended 31 December 2016 be                   reviewed by the external auditors.

Hereinafter (i) and (ii) be collectively referred as (“the Outstanding Information”)

(iii)  board of directors of CSL is required to announce to Bursa Securities the information set out in (iii)(a)-(d) below (“Status Updates”) within three (3) market days from the date hereof i.e. by 5.00 p.m., Friday, 24 November 2017.

(a)     Steps to be taken by CSL to address the issues mentioned in item (i)(a)-(c) and (ii)  above;

(b)     Confirmation from the auditors that they have been appointed to undertake the review;

(c)     Steps to be taken to appoint new directors pursuant to Paragraphs 4A.04(2), 4A.04A, 15.02(1), 15.09 and 15.10 of the               LR; and

(d)     Confirmation from the lawyer, Zhi Jun Law Firm that it has obtained the necessary authority from CSL to undertake the              review on the material litigations.

Pursuant to Bursa Securities’ powers under Paragraph 16.02(1)(j) of the LR, in the event CSL fails to provide the Status Updates as set out above, Bursa Securities will suspend the trading of CSL’s shares. In this respect, such a suspension will be effected via issuance by Bursa Securities to the market on 24 November 2017 a notice of suspension in the trading of the shares of CSL on which will take effect from 9.00 a.m., Tuesday, 5 December 2017.

The aforesaid decision is arrived at in consultation with the Securities Commission Malaysia (“SC”) and after taking into consideration the following:-

(1)     Lack of cooperation and/or inability by CSL to provide satisfactory response to Bursa Securities and SC in respect of the Outstanding Information. Despite numerous requests by both the regulators to the Company to verify and clarify in the Outstanding Information, the Company has failed to do so giving rise to the concern on the accuracy and reliability of the financial statements issued by the Company to date.

(2)     Uncertainty as to the management of CSL arising from, amongst others, various resignations by its directors and chief financial officer (“CFO”) as set out below as well as the inability by the management of CSL to contact the remaining directors.

Directors and CFO’s resignations

(3)        In the circumstances, in the event CSL fails to provide the Status Updates as required, the suspension is necessary in the public interest and for the protection of investors.