TROUBLED Jurong Technologies Industrial Corp risks being wound up after OCBC Bank demanded that it repay loans of about $56.6 million.

Jurong Tech and its wholly-owned subsidiary Jurong Hi-Tech Industries (JHT) have received a statutory demand from OCBC claiming full repayment of two amounts: $21.9 million and $34.7 million (US$23.3 million).

Last Friday, OCBC lawyers said that if payment was not made by Jurong Tech and JHT within three weeks from Jan 9, the bank would be entitled to start winding-up proceedings against them.

Jurong Tech, JHT and its financial advisers Korda Mentha Neo have met their creditors, according to a filing made by Jurong Tech to the Singapore Exchange yesterday.

The firm also said that it will continue to negotiate with creditor banks and financial institutions, including OCBC, 'to achieve a favourable resolution of this matter'.

Jurong Tech chairman Lin Li Fang sold about 28.2 million shares in the company - or 4.64 per cent of its issued share capital - on Jan 2.

This trimmed Ms Lin's holding in the company to 7.31 per cent.

According to a filing at the time, the sale was 'initiated by financial institution to meet obligation'.

The moves by Jurong Tech follow an announcement by the firm last month that alleged irregularities in its accounts will not have a material impact on its third-quarter results.

It also maintained then that, despite the allegations over its accounts, banks were still supporting it.

Trading in Jurong Tech shares was halted yesterday and will resume today.

The shares last traded at nine cents.

FRANCIS CHAN

This article was first published in The Straits Times on January 14, 2009.