(SINGAPORE) KPMG was removed as external auditors to NEL Group yesterday at an extraordinary general meeting marked by heated exchanges between the parties.
Three directors were also removed from the NEL board but chief executive Peter Choong Choo Leong and non-executive director Chieng Siong Kuong kept their board seats.
The EGM was requisitioned by two NEL shareholders seeking to oust all board members and KPMG LLP as external auditors, in a sign of unhappiness with the state of affairs at the group.
According to the circular, the two shareholders who requisitioned the EGM held at NEL’s office were Chen Chee Peng, who owns a 15.33 per cent stake in NEL, and Ngan Wan Pun, who owns 2.61 per cent.
The duo were shareholders of TLG Group and had swopped their TLG shares in June 2008 for NEL shares, turning TLG into a wholly-owned unit of NEL.
They managed to garner enough votes to remove finance and corporate director Lee Jyh Kiong; executive director Law Chor Soon; and non-executive director Ameezan bin Jamal.
Three new directors were voted in yesterday to replace them with immediate effect. Quah Hoe Phang is the new chairman, Lee Chee Kheng is independent director and Ng Aik Kee is now executive director of NEL.
Incidentally, all three new directors were linked to Chin Foh Berhad, a firm that was delisted from Bursa Malaysia in 2007 after its debt-ridden subsidiary faced a winding-up petition and its restructuring plan was rejected by Malaysia’s Securities Commission.
Mr. Ng is executive director of Chin Foh while Mr. Lee was a major shareholder and director.
Mr. Quah is former managing director of Chin Foh and there is a derivative action filed against him alleging breach of fiduciary duties as a director of Chin Foh. The claim is disputed and there is a pending application to strike out the suit. Both Mr. Quah and Mr. Ng also face petition against them in Malaysia for alleged ‘oppression’ in certain transactions related to Chin Foh.
The new directors now have key control of important board committees at NEL. Mr. Lee is the new chairman of both the audit committee and the remuneration committee while Mr. Ng and Mr. Lee make up two of the three directors in the nominating committee.
BT understands that NEL will soon hold a meeting with shareholders again to appoint new external auditors.
NEL is alleged to have been involved in ‘round-tripping’ transactions used by another Singapore-listed Malaysian firm, Advance Modules, to cover up a fake sales record, according to a report by KPMG, who were special auditors to Advance Modules.
Shareholders at yesterday’s meeting heard KPMG and NEL present their opposing sides of the facts. NEL levelled accusations at KPMG over a perceived conflict of interest as special auditors to Advance Modules and as external auditors to NEL. The directors questioned the manner in which the auditors obtained confidential information on NEL to arrive at the conclusion that it was involved in dodgy transactions.
KPMG rebutted the allegations, saying that it had no interest to report against NEL. In its report on Advance Modules last November, information on NEL was derived from the computer of Advance Modules’ general manager and NEL was mentioned by its former name Nucleus Electronics.
KPMG had in December submitted a confidential report to the finance minister, flagging potential fraud and dishonesty in NEL. Under the Singapore Exchange’s directive, NEL appointed Ernst & Young Risk Advisory Services as special auditors to look into the group’s affairs.
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NEL auditors, 3 directors ousted at fiery EGM
By LYNETTE KHOO
27 February 2009
(SINGAPORE) KPMG was removed as external auditors to NEL Group yesterday at an extraordinary general meeting marked by heated exchanges between the parties.
Three directors were also removed from the NEL board but chief executive Peter Choong Choo Leong and non-executive director Chieng Siong Kuong kept their board seats.
The EGM was requisitioned by two NEL shareholders seeking to oust all board members and KPMG LLP as external auditors, in a sign of unhappiness with the state of affairs at the group.
According to the circular, the two shareholders who requisitioned the EGM held at NEL’s office were Chen Chee Peng, who owns a 15.33 per cent stake in NEL, and Ngan Wan Pun, who owns 2.61 per cent.
The duo were shareholders of TLG Group and had swopped their TLG shares in June 2008 for NEL shares, turning TLG into a wholly-owned unit of NEL.
They managed to garner enough votes to remove finance and corporate director Lee Jyh Kiong; executive director Law Chor Soon; and non-executive director Ameezan bin Jamal.
Three new directors were voted in yesterday to replace them with immediate effect. Quah Hoe Phang is the new chairman, Lee Chee Kheng is independent director and Ng Aik Kee is now executive director of NEL.
Incidentally, all three new directors were linked to Chin Foh Berhad, a firm that was delisted from Bursa Malaysia in 2007 after its debt-ridden subsidiary faced a winding-up petition and its restructuring plan was rejected by Malaysia’s Securities Commission.
Mr. Ng is executive director of Chin Foh while Mr. Lee was a major shareholder and director.
Mr. Quah is former managing director of Chin Foh and there is a derivative action filed against him alleging breach of fiduciary duties as a director of Chin Foh. The claim is disputed and there is a pending application to strike out the suit. Both Mr. Quah and Mr. Ng also face petition against them in Malaysia for alleged ‘oppression’ in certain transactions related to Chin Foh.
The new directors now have key control of important board committees at NEL. Mr. Lee is the new chairman of both the audit committee and the remuneration committee while Mr. Ng and Mr. Lee make up two of the three directors in the nominating committee.
BT understands that NEL will soon hold a meeting with shareholders again to appoint new external auditors.
NEL is alleged to have been involved in ‘round-tripping’ transactions used by another Singapore-listed Malaysian firm, Advance Modules, to cover up a fake sales record, according to a report by KPMG, who were special auditors to Advance Modules.
Shareholders at yesterday’s meeting heard KPMG and NEL present their opposing sides of the facts. NEL levelled accusations at KPMG over a perceived conflict of interest as special auditors to Advance Modules and as external auditors to NEL. The directors questioned the manner in which the auditors obtained confidential information on NEL to arrive at the conclusion that it was involved in dodgy transactions.
KPMG rebutted the allegations, saying that it had no interest to report against NEL. In its report on Advance Modules last November, information on NEL was derived from the computer of Advance Modules’ general manager and NEL was mentioned by its former name Nucleus Electronics.
KPMG had in December submitted a confidential report to the finance minister, flagging potential fraud and dishonesty in NEL. Under the Singapore Exchange’s directive, NEL appointed Ernst & Young Risk Advisory Services as special auditors to look into the group’s affairs.
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