|  Ben Ng: 'The banks act as a third party counter-checking on us.' Photo by Leong Chan Teik
SINOTEL TECHNOLOGIES is in a sweet spot: It is reaping the rewards of the billions of dollars earmarked to upgrade China’s telecommunications network.
But being a S-chip, the company is part of the category of China companies listed on SGX that investors have a lingering anxiety over their corporate governance.
Ben Ng, its vice-president of corporate communications and investor relations, knows it.
That’s why – beyond speaking about the massive business boom for companies like his - he sought to address investors’ concern about corporate governance when he spoke to investors at the SIAS Asian Investment Conference and Exhibition yesterday (July 19).
An unusual point is related to the credit facilities granted to Sinotel - 92.8% of whose sales in Q1 this year was for wireless phone network infrastructure - by HSBC and DBS Group in Beijing.
“When we secure a new contract, we present it to the bank and we will get 80% financing for this contract.
 Sinotel installed the infrastructure that enabled mobile phones to be used inside the Beijing Railway station.
"When our customer pays us, they pay the bank, so the bank acts as an independent auditor. There is a third party counter-checking on us. That should send a strong signal to investors regarding how genuine our contracts are.”
Sinotel needs the bank loans as working capital to install infrastructure that enhances the quality of wireless signal coverage in and outside of buildings in China. Unfortunately, its customers take an average of 186 days to pay up, largely because they need to test the systems first. It's an industry norm.
Sinotel’s chairman, Jia Yue Ting, has given a personal guarantee on the bank loans.
Ben also pointed to the quality and size of Sinotel’s key customers - China Mobile and China Unicom, which are not only Chinese state-owned enterprises but also reputable companies which are among the largest in the world.
 Sinotel's financials.
On initiatives and efforts that Sinotel undertakes on the corporate governance front, Ben gave a quick rundown:
* Quarterly reporting of results: Sinotel does this although it’s not obligated to under SGX rules as its market capitalization is under $100 million.
* Sinotel’s auditor is no unknown but the international firm of Baker Tilly TFWLCL, the 8th largest auditing firm in the world.
* Timely corporate updates on new contracts, etc.
* An internal investor relations department that keeps in touch with fund managers and analysts.
* Frequent engagement with investors and the media – Sinotel has been featured in The Edge, Pulses, Business Times and other media.
* Three research houses now cover Sinotel: Phillip Securities, Westcomb, DMG & Partners. To obtain their analyst reports, contact
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