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I refer to page 220 of Kemai's IPO prospectus.
On October 2015, Tianjin Kemai's Inner Mongolia plant was fined a total of 160,000 RMB for 4 environmental violations.
On March 2016, Tianjin Kemai's Tainjin plant was issued a stop work order by the government after a site accident which involved killed 1 worker and injured 2 others.
Sunsine clarified in its announcement that it "weaknesses identified by the Inspection Team does not amount to any breach of Environmental Protection Laws" and "No stop or suspension order was issued by the Inspection Team or the local authorities, nor was the production of Shandong Sunsine affected in any way."
Taking Kemai's violations into perspective, Sunsine weaknesses is minor and manageable.
We should take a relative approach to assessing environmental compliance as no company will be 100% compliant all the time without any shortfalls. As long as Sunsine remains ahead of its competitors in environmental compliance, they will be the last to stop production due to environmental/safety issues.
To give an analogy : If a child does not score 100/100 in a test, does that mean he has failed ? He might not get full marks, but as long as he is constantly first in class, we can be assured that should a hard test come one day, he will be the last to fail.
On October 2015, Tianjin Kemai's Inner Mongolia plant was fined a total of 160,000 RMB for 4 environmental violations.
On March 2016, Tianjin Kemai's Tainjin plant was issued a stop work order by the government after a site accident which involved killed 1 worker and injured 2 others.
Sunsine clarified in its announcement that it "weaknesses identified by the Inspection Team does not amount to any breach of Environmental Protection Laws" and "No stop or suspension order was issued by the Inspection Team or the local authorities, nor was the production of Shandong Sunsine affected in any way."
Taking Kemai's violations into perspective, Sunsine weaknesses is minor and manageable.
We should take a relative approach to assessing environmental compliance as no company will be 100% compliant all the time without any shortfalls. As long as Sunsine remains ahead of its competitors in environmental compliance, they will be the last to stop production due to environmental/safety issues.
To give an analogy : If a child does not score 100/100 in a test, does that mean he has failed ? He might not get full marks, but as long as he is constantly first in class, we can be assured that should a hard test come one day, he will be the last to fail.