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UE discovers irregular transactions in relation to subsidiaries

Wednesday, June 17, 2015 - 20:06

UNITED Engineers (UE), a diversified property and engineering company, announced after the market closed on Wednesday that it has found a series of irregular transactions in relation to its subsidiaries.

Based on available information and pending further inquiries, these transactions appear to have taken place between 2010 and 2015 and the value of the contracts amount to approximately S$11 million, the company said.

The irregularities were detected during the course of the company's routine internal audit of its subsidiaries in late-May 2015, and several were in relation to various contracts awarded by its wholly-owned subsidiary United Engineers Developments and other subsidiaries of the company to certain third-party contractors, it said.

The company has appointed Allen & Gledhill LLP as lawyers to advise it on the matter. It has also brought the matter to the attention of its statutory auditors Ernst & Young LLP.

In the irregular transactions that were uncovered, quotations for proposed contracts were found to have been forged by the employees. "This was carried out with the view of preferring certain third-party contractors, which would then be awarded the relevant contracts," the company said.

The services of the employees concerned have been suspended and the matter reported to the appropriate authorities. The company said it has, since the discovery of the matter, taken steps to identify the nature and extent of its losses and to recover them in consultation with its lawyers.

Based on the available information, the above transactions do not appear to have any material effect on the consolidated audited financial statements of the company between FY10 and FY14, it added.

The company will make further announcements as and when there are any material developments in this matter.

On Wednesday, the counter closed unchanged at S$2.57.

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