Judicial managers flag issues at Jurong Tech
(SINGAPORE) Judicial managers of Jurong Technologies Industrial Corp have found 'questionable' accounting and business practices at the company that would significantly impact its finances, the company said last night.
The managers, Tam Chee Chong and Keoy Soo Earn of Deloitte & Touche, 'have forwarded their findings to the regulatory authorities for their consideration', according to a brief statement.
They said they found the questionable 'accounting transactions, practices and matters' while reviewing the company's accounts and business practices.
The judicial managers are finalising the company's financial statements for FY2008 and taking into account the adjustments that will be made arising from the questionable transactions, the statement said.
The release of the full-year results have been delayed several times and the latest extension gives the company, a contract manufacturer, up till Aug 14 to finalise its accounts.
No other details were given and it is not known if the questionable practices are related to 'alleged irregularities' in the administration of receivable financing facilities, which the company's auditors Ernst & Young uncovered last December.
Jurong Tech said then that the irregularities would have no 'material financial impact to the unaudited results' for the company's third quarter to Sept 30, 2008.
It said that two areas of the balance sheet are affected. Trade payables and accruals should have read a higher S$111,376,000 instead of S$106,383,000, and amounts due to banks should be a lower S$277,708,000 instead of S$282,701,000, the company said.
Mr Tam and Mr Keoy were appointed as judicial managers in February after at least seven banks demanded repayments of loans amounting to more than US$200 million.
The banks included Rabobank International, Belgian outfit KBC, ABN Amro Bank, Sumitomo Mitsui Banking Corporation, United Overseas Bank, OCBC Bank and DBS Bank.
Judicial management happens when a court appoints a manager to direct the affairs of a company in trouble. Under Section 227A of the Companies Act, this can be when a company is unable to pay its debts but there is some chance of keeping the business going without having to wind it up.
Jurong Tech's judicial managers have been searching for white knights or investors in the company but have so far received no firm offer, according to the latest monthly updates.
Meanwhile, they have already sold off some of the company's assets, including a Tuas factory for S$3.53 million with a remaining lease of about 17 years, and unused factory land and building in Malaysia for RM3.5 million (S$1.4 million).
These are public listed companies. Without the accountants, the fiscal reports cannot be fudged. The ring leaders can't do anything if the accountants say 'no'. That's why they are labelled as 'professionals along with doctors, lawyers and engineers'.
One Enron case and another Worldcom.. why do we even bother to govern these accountants as professionals...
seems that the world cannot be perfect, thanks for the article, i remember seeing the article about OCBC demanding repayment from them b4