Management not giving sufficient info on state of affairs at units, they lament
By LYNETTE KHOO 12 December 2008
Advance Modules’ independent directors (IDs), who are trying to determine the current state of affairs of the group’s subsidiaries and their prospects, have voiced their frustration over the lack of cooperation from the management.
In an announcement signed by chairman and independent director Michael Tang yesterday, the independent directors said that they ‘have not been provided with sufficient cooperation, assistance and information’ from the management, including Vincent Tan, who voluntarily suspended his duties as managing director from Nov 19 but remained as a director.
Last month, the group appointed an independent committee comprising some IDs to review all matters related to the findings of special auditors KPMG, which pointed to the group having created fake records of sales as part of an ‘earnings management process’ to meet an internal profit target for fiscal 2005.
The group allegedly attempted to cover this up by entering into a complex series of ‘round-tripping’ transactions to make it seem like it was receiving payments from the buyer.
Another Singapore-listed company, NEL Group, and its subsidiaries were allegedly involved in the transactions.
Advance Modules’ IDs said yesterday that they believe the subsidiaries have received several demand letters for the repayment of debts due.
‘Based on the available information, the independent directors of Advance Modules are seriously concerned with the ability of its subsidiaries to conduct their businesses in a viable manner for the foreseeable future and the ability of the Advance Modules and its subsidiaries to discharge their liabilities as they fall due in the normal course of business,’ the IDs said.
They added that they ‘have made efforts but have been unable to obtain sufficient information to adequately determine the current state of business and affairs of the group, and the outlook going forward’.
The IDs are hence seeking legal advice on these matters. They are also trying to get another executive director to provide them with information.
Concerns over the validity and recoverability of receivables relating to the sales in question were first raised by auditors Deloitte & Touche in 2006, who refused to give Advance Modules a clean bill of health for fiscal 2005 results.
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Independent directors of Advance Modules upset
Management not giving sufficient info on state of affairs at units, they lament
By LYNETTE KHOO
12 December 2008
Advance Modules’ independent directors (IDs), who are trying to determine the current state of affairs of the group’s subsidiaries and their prospects, have voiced their frustration over the lack of cooperation from the management.
In an announcement signed by chairman and independent director Michael Tang yesterday, the independent directors said that they ‘have not been provided with sufficient cooperation, assistance and information’ from the management, including Vincent Tan, who voluntarily suspended his duties as managing director from Nov 19 but remained as a director.
Last month, the group appointed an independent committee comprising some IDs to review all matters related to the findings of special auditors KPMG, which pointed to the group having created fake records of sales as part of an ‘earnings management process’ to meet an internal profit target for fiscal 2005.
The group allegedly attempted to cover this up by entering into a complex series of ‘round-tripping’ transactions to make it seem like it was receiving payments from the buyer.
Another Singapore-listed company, NEL Group, and its subsidiaries were allegedly involved in the transactions.
Advance Modules’ IDs said yesterday that they believe the subsidiaries have received several demand letters for the repayment of debts due.
‘Based on the available information, the independent directors of Advance Modules are seriously concerned with the ability of its subsidiaries to conduct their businesses in a viable manner for the foreseeable future and the ability of the Advance Modules and its subsidiaries to discharge their liabilities as they fall due in the normal course of business,’ the IDs said.
They added that they ‘have made efforts but have been unable to obtain sufficient information to adequately determine the current state of business and affairs of the group, and the outlook going forward’.
The IDs are hence seeking legal advice on these matters. They are also trying to get another executive director to provide them with information.
Concerns over the validity and recoverability of receivables relating to the sales in question were first raised by auditors Deloitte & Touche in 2006, who refused to give Advance Modules a clean bill of health for fiscal 2005 results.
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