KUALA LUMPUR (Feb 29): SILVER BIRD GROUP BHD [] has suspended its group managing director, Datuk Tan Han Kook and two other key executives effective Feb 24 as it undertakes an internal inquiry into allegations of irregularities in the company’s accounts.
The company said on Wednesday the other two suspended were executive director Ching Siew Cheong and the general manager for accounts and finance Lai Poh Mei. All three were suspended with full pay and benefits.
“Their suspension is to facilitate the conduct of an internal inquiry into allegations of, amongst others, irregularities in the company’s accounts which were recently brought to the attention of the board of directors when the auditors expressed concerns over the validity and recording of certain transactions for which the auditors were not able to obtain the relevant supporting evidence and satisfactory explanations from the management of the company,” Silver Bird Group said in a statement to Bursa Malaysia.
The announcement confirmed The Edge Financial Daily report on Wednesday that three key executives were suspended pending the outcome of an internal investigation into what is alleged to be financial irregularities.
Silver Bird also said the board of directors had resolved to maintain its financial year end at Oct 31, 2011.
"Hence, the company will issue its AAA (audited annual accounts) for the financial year ended Oct 31, 2011 by Feb 29, 2012,” it said.
Silver Bird said among the main concerns expressed by the auditors, were the contract for the design, renovation or refurbishment to an existing warehouse and factory with a contract sum of RM10.6 million.
There were also concerns about payments made to an equipment supplier of RM69.0 million for up to Oct 31, 2011; the sweetened creamers business segment which recorded a revenue of RM31.9 million for the FYE 2011 and audit trail of all sales transactions.
Silver Bird said a special committee comprising of five non-executive directors had been set up to oversee the operations of the group.
“At this stage, the board of directors is not able to ascertain the extent of the financial and operational impact of the alleged irregularities, although, based on the issues highlighted by the auditors, the maximum exposure faced by the group arising from the alleged irregularities may amount to approximately RM111.5 million,” it said.
Silver Bird also said in order to ascertain the financial position of the group, the company had on Feb 26, appointed PKF Advisory Sdn Bhd as the forensic accountants to conduct a forensic review into the affairs of the company.
The board of directors had appointed Messrs Wong Kian Kheong on Feb 25, 2012 as legal advisors for the company and intends to form an inquiry committee to look into the investigation on the group’s accounts.
“The forensic accountants and the inquiry committee shall be required to complete their investigations within three months from the date of this announcement,” it said.
The board has lodged a police report in relation to the alleged financial irregularities on Feb 26 and reported the matter to the Securities Commission, Bursa Malaysia Securities Bhd and the Companies Commission of Malaysia on Feb 27.
“Given that the auditors have expressed a disclaimer opinion on the company’s latest audited accounts for the financial year ended Oct 31, 2011, the shareholders and investors are advised to trade cautiously with regard to the company’s securities,” it said.
Trading resumes on Thursday.
The company said on Wednesday the other two suspended were executive director Ching Siew Cheong and the general manager for accounts and finance Lai Poh Mei. All three were suspended with full pay and benefits.
“Their suspension is to facilitate the conduct of an internal inquiry into allegations of, amongst others, irregularities in the company’s accounts which were recently brought to the attention of the board of directors when the auditors expressed concerns over the validity and recording of certain transactions for which the auditors were not able to obtain the relevant supporting evidence and satisfactory explanations from the management of the company,” Silver Bird Group said in a statement to Bursa Malaysia.
The announcement confirmed The Edge Financial Daily report on Wednesday that three key executives were suspended pending the outcome of an internal investigation into what is alleged to be financial irregularities.
Silver Bird also said the board of directors had resolved to maintain its financial year end at Oct 31, 2011.
"Hence, the company will issue its AAA (audited annual accounts) for the financial year ended Oct 31, 2011 by Feb 29, 2012,” it said.
Silver Bird said among the main concerns expressed by the auditors, were the contract for the design, renovation or refurbishment to an existing warehouse and factory with a contract sum of RM10.6 million.
There were also concerns about payments made to an equipment supplier of RM69.0 million for up to Oct 31, 2011; the sweetened creamers business segment which recorded a revenue of RM31.9 million for the FYE 2011 and audit trail of all sales transactions.
Silver Bird said a special committee comprising of five non-executive directors had been set up to oversee the operations of the group.
“At this stage, the board of directors is not able to ascertain the extent of the financial and operational impact of the alleged irregularities, although, based on the issues highlighted by the auditors, the maximum exposure faced by the group arising from the alleged irregularities may amount to approximately RM111.5 million,” it said.
Silver Bird also said in order to ascertain the financial position of the group, the company had on Feb 26, appointed PKF Advisory Sdn Bhd as the forensic accountants to conduct a forensic review into the affairs of the company.
The board of directors had appointed Messrs Wong Kian Kheong on Feb 25, 2012 as legal advisors for the company and intends to form an inquiry committee to look into the investigation on the group’s accounts.
“The forensic accountants and the inquiry committee shall be required to complete their investigations within three months from the date of this announcement,” it said.
The board has lodged a police report in relation to the alleged financial irregularities on Feb 26 and reported the matter to the Securities Commission, Bursa Malaysia Securities Bhd and the Companies Commission of Malaysia on Feb 27.
“Given that the auditors have expressed a disclaimer opinion on the company’s latest audited accounts for the financial year ended Oct 31, 2011, the shareholders and investors are advised to trade cautiously with regard to the company’s securities,” it said.
Trading resumes on Thursday.
