Saturday, 13 June 2015

Tanjung Offshore: special auditor's report (2)

I wrote before about the special auditor's report regarding certain irregularities in Tanjung Offshore.

The Star wrote today an article about the same matter: "Spotlight on Tanjung Offshore deals abroad".

One line from the article:

"..... the audit report sighted by StarBizWeek ...."

And then quite a few new revelations that were not included in the rather stingy announcements to Bursa. It is good that we now know a bit more about the report from Ferrier Hodgson MH Sdn Bhd, but can we please also read the full document? Surely minority investors and interested persons are entitled to know the contents, having been left in the dark for so long.

Some of those new revelations are:

On the China and Philippines venture, Ferrier Hodgson found that there was too much reliance on one Stephen Lee, who promoted both the deals to the company. Lee was born in Taiwan now a China national, according to the report. Similarly, Ferrier Hodgson finds that Tanjung Offshore did not follow proper corporate protocol for its RM6.2mil foray into a chromite mine project in the Philippines in 2013. Again Lee was the promoter of this project. “A trading play, the buying and selling of chromite was facilitated by Stephen Lee and his associates with Tanjung Offshore making the profit differentials,” findings of forensic audit states.

It would be interesting to know how this Stephen Lee is connected to Tanjung Offshore, because surely there has to be some connection there.

Based on a letter dated Feb 26, 2014 by Tanjung Offshore’s legal adviser in the UK and the company’s board paper presented to board members on Feb 27, 2014, the estimated development cost of the property was known to the management and board members of Tanjung Offshore, says the report. “Therefore, it should have been disclosed to Bursa, especially since Bursa had specifically questioned Tanjung Offshore on this matter after the company’s first announcement of the Birmingham purchase.” states the firm in the report.

Usually Bursa will not take it lightly, being wrongfully informed about a matter it specifically asked. We can therefore expect some enforcement from Bursa and/or Securities Commission regarding this (and possibly other) matters. Which persons inside Tanjung knew (or should have known) about this?

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