Epicentre transactions flagged by auditor, shares fall 12%
Shares of Apple reseller Epicentre Holdings fell by 12 per cent after auditors would not sign off on the company's financial statements.
Multi-million-dollar transactions with entities involving shareholders were flagged in a report by accountancy firm BDO. Epicentre shares fell 1.5 cents to close at 11 cents yesterday. It has appointed Deloitte and Touche to do an independent review.
Three deals were put under the microscope in the report. In one, Epicentre purportedly entered into consultancy services agreements with customer entities where some directors were company shareholders.
It recorded $6.45 million in income and other receivables from these agreements. But the auditors said they were not given satisfactory evidence for the veracity of the transactions.
Also under scrutiny was a $1.76 million loan Epicentre took from a lender owned by a shareholder. An agreement was later inked to swop out the Epicentre executive chairman for the original lender.
"Because of the significance of the matters described", the audit team said it could not issue an opinion on Epicentre's full-year statements. The unaudited financial statement had claimed a $560,000 net profit on revenue of $100 million.
The company saw a change in top management last year. Mr Fong Teck Loon stepped down as chief executive officer, and director Lim Tiong Hian was made executive chairman and acting CEO. - THE STRAITS TIMES
FOR MORE, READ THE STRAITS TIMES TODAY