Business

Yamada's auditors file report with Ministry of Finance

Inconsistencies in shiitake mushroom supplier's financial records


The external auditors of shiitake mushroom supplier Yamada Green Resources have taken the rare step of filing a report with Singapore's Ministry of Finance in the course of auditing the S-chip company.

The report was filed under Section 207 (9A) of the Companies Act, said Yamada in a notification to the Singapore Exchange last week.

This section of the Act relates to a situation in which an auditor, in the course of his duties, has reason to believe that a serious offence involving fraud or dishonesty is being or has been committed against the firm by its officers or employees.

Yamada said it is not privy to the contents of the report, although the auditors, BDO Singapore, have confirmed that it relates to certain inconsistencies in the group's financial records.

The report also involves other queries which were raised in the course of their audit for the group's financial statements for fiscal year 2017, as announced on Sept 5.

Yamada said it plans to obtain legal advice on the matter before deciding on its next steps.

At the same time, Yamada said its attention has been drawn to a formal notice issued by the Ministry of Finance of China and the China Securities Regulatory Commission, stating that BDO China - the Chinese affiliate of BDO Singapore - was suspended from taking on "securities-related engagements" as at May 23, pending the implementation of certain rectification works.

The suspension was lifted on Aug 10.

"The board takes a serious view of this matter as audit work had been performed by BDO China for the group's PRC subsidiaries during the suspension period, and this may have potentially serious implications for the group," said Yamada.

The setback is the latest in a series of unfortunate events that have beset Yamada.

Earlier this month, it reported that a vehicle transporting finance documents and IT/computer hardware went up in flames somewhere in China's Fuzhou city on Aug 30, with the driver suffering minor injuries.

The vehicle was moving the documents and hardware from the group's research and development centre to its offices as part of an administration consolidation.

A preliminary check had found that many of the documents relating to the 2017 and 2018 financial years were among the papers affected or destroyed, Yamada claimed.

Trading in Yamada shares has been suspended.

They last changed hands at 33 cents on Aug 30.

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