THUMB drive maker Trek 2000 International on Wednesday said that law firm TSMP, which was carrying out an independent review into certain interested-party transactions of the group, has since presented preliminary findings to the company's audit committee (AC).
TSMP has also highlighted to the AC that the full inquiry would require information on past transactions, which would need the help of a forensic accounting firm to review and analyse from a forensic financial perspective.
The AC has accepted the recommendation to appoint a forensic accounting firm, and has also decided to expand the scope of the forensic accounting firm's engagement to include any suspicious transactions.
RSM Corporate Advisory has been appointed as the forensic accountants to carry out the investigation and report findings to the AC.
RSM will review the nature and circumstances of any interested/related party transactions, including the transactions which are the subject matter of the Commercial Affairs Department (CAD) investigations.
It will also review the internal approval process, ascertain the number of transactions, the quantum involved, whether such transactions were conducted on normal commercial terms, and give its opinion on the financial impact to the group, as well as identify any lapses or internal control weakness, breaches of directors' duties or listing rules, and make the appropriate recommendations.
Meanwhile, "the board is currently actively engaging the business associates and stakeholders of the group to ensure business continuity", Trek 2000 said.
In April this year, the auditors of Trek 2000 lodged a report with the Accounting and Corporate Regulatory Authority (Acra) related to documentation deficiencies. These deficiencies had to do with some sale transactions between one of its subsidiaries and a customer. The total value of those transactions was about US$3.2 million.
Later in May, Trek 2000 said that the CAD was investigating the chief financial officer Gurcharan Singh of a possible offence under the Penal Code.
On June 1, it added that chairman and CEO Henn Tan, president of regional sales Foo Kok Wah, and executive director Poo Teng Pin, were also interviewed by the CAD in relation to its investigations.
Pending the outcome of the CAD investigations, they have been released on bail, and no formal charges have been laid against them.