(SILVER opening stock price today (24.4.2012) was 18.5 sen)
Shareholders are expected to demand from the board of directors of Silver Bird Group Bhd details on the ongoing investigation into the financial irregularities when the company's AGM is held next Monday.
An official representing one of the major shareholders who spoke on condition of anonymity said the board's independent directors were preparing to be hit by questions on how the fraud, which could expose the company to as much as RM111.5mil in losses, had eluded the board and auditors for so long.
Other likely questions include the validity of the condensed milk joint venture with major shareholder Koperasi Permodalan Felda (KPF), the solvency of the company and the status of its regularisation plan.
The shareholders would also want to know a possibility of a white knight involving Silver Bird's largest shareholder Lembaga Tabung Haji (LTH), of which speculation on LTH's involvement has been rife for weeks. The fund's group managing director and chief executive officer Datuk Ismee Ismail has declined comment on the matter.
The independent directors formed a special committee to run the daily affairs of the bread and confectionary maker after suspending group managing director-cum-founder Datuk Jackson Tan Han Kook, executive director Ching Siew Cheong and general manager for accounts and finance Lai Poh Mei on Feb 24.
They also formed an inquiry committee and appointed PKF Advisory Sdn Bhd as the forensic accountants to conduct a forensic review into the affairs of the company. Both have to complete their investigations within three months from Feb 29.
The directors have also appointed a legal advisor on Feb 25, lodged a police report on Feb 26 and reported the matter to the Securities Commission on Feb 27.
However, the official told StarBiz that fraud was not always easy to detect as a company's balance sheet could be fiddled with in ways that would pass even the independent auditors.
“When people set out to defraud, they'll do anything to hide the wrongdoings for the longest possible time, so there are always tell-tale signs such as messing with the books in order to make it harder to detect,” she said.
Officials from LTH, Berjaya Corp Bhd and Sydney-based venture capital firm CVC Ltd declined to comment officially on what their next course of action would be on the matter. They respectively held 22.19%, 20.53% and 9.07% stakes in the company while Koperasi KPF held a 12.7% stake.
CVC's board representative, Peter John McLoghlin, resigned on April 11, citing that being based in Sydney made it difficult for him to contribute effectively and frequently, a fact that shareholders might pounce on as the resignation has only happened now instead of before.
News of the irregularities surfaced in late February after Silver Bird's independent auditors Crowe Horwath refused to provide a basis for an audit opinion to the financial report for the financial year ended Oct 31, 2011.
The auditors pointed out that poor keeping and the inability to verify sales transactions were among the main reasons why they refused to provide the opinion.
Silver Bird has since defaulted on loans to creditor banks, admitted into Practice Note 17 status and had a distribution agreement for prepaid cards (one of the company's main sources of revenue) terminated by Maxis Bhd.
Source: www.thestar.com.my
0 comments:
Post a Comment