Monday, 16 April 2012

Silverbird: I declare that the statements may be incorrect

Silverbird's 2011 annual report is out. The tone is set on page 5:

"These are trying times that have befallen the Group and it is unfortunate that the scourge of financial irregularities have crept into our fold. Many will be aware from the announcements by the Company that this year was marred by the recent discovery of financial irregularities that have cast severe doubts on the accuracy and reliability of the financial reporting of the Group, and which have led to some of the Company’s subsidiaries defaulting in their respective loan repayments and the Company being classified as an affected listed issuer under Practice Note 17 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad".

But then rather optimistically:

"I am pleased to inform that the preliminary findings indicate that the businesses would be profitable if properly managed".

A bold statement, given that Silver Bird has accumulated losses of RM 44 million and that is without taking into account of the financial irregularities, which can increase the losses further, probably substantial. "When it rains, it pours" is almost always true in these kind of cases.

No dividend is announced (no surprise there), but the Directors also make a gesture:

"In view of the crisis before the Company, the Board of Directors has resolved to put all directors’ fees for the financial year ending 31 October 2012 in abeyance pending completion of the on-going investigations into the financial irregularities".

Interesting statement comes later:

"I, Richard George Azlan Bin Abas, being an independent non-executive director of Silver Bird Group Berhad, who has taken primary responsibility for the financial management of Silver Bird Group Berhad, upon the suspension from work of the director and/or officer primarily responsible for the financial management of Silver Bird Group Berhad, do solemnly and sincerely declare that, to the best of my knowledge and belief, the financial statements set out on pages 36 to 90 may be incorrect, in light of the circumstances as highlighted in Note 47 to the financial statements and the Statement of Directors, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960".

In other words, the value of the report is very limited at best.

I hope that the investigation by PKF Advisory is finished soon with a healthy dose of transparency what exactly has happened.

1 comment: