Allied Tech says it will heed wait-and-see advice on missing escrow funds

CATALIST-LISTED Allied Technologies, which is on the hunt for S$33 million handled by scandal-hit law firm JLC Advisors, told the bourse on Tuesday night that it will wait for the results of an audit before taking any action to recover the funds that had been in escrow.

"This is in the interest of not incurring unnecessary costs," the company said.

It added that an ongoing special audit by PwC - as well as investigations by the police force's Commercial Affairs Department - could "uncover further facts and/or relevant parties that might be culpable", and prompt further future legal action that would incur fresh costs.

Allied Tech also said that it was unable at present to put money in a new escrow account, despite instructions from the Singapore Exchange (SGX) to do so.

SGX later ordered Allied Tech, in a notice of compliance, to "expeditiously procure the release" of the funds and put them - along with cash and bank balances that exceed the group's operational requirements, and certain other sums - in a new escrow account run by any approved and licensed financial institution here.

But the group has now said that based on historical cash requirements and in-flow, it has "no cash and bank balances which are currently in excess of the group's operational requirements to be placed in the new escrow account". Its closing cash balance was S$4.5 million as at June 30.

It also said that it "has already taken all other practicable steps to recover the monies due from JLC", such as making a police report and filing a complaint with the Law Society.

But its request for copies of bank documents related to the escrow account has been unsuccessful, the company added. It told the bourse that DBS Bank, acting through lawyers, said that JLC has declined to let the bank furnish those documents.

PwC, which was appointed as a special auditor in June, has been tasked by Allied Tech with probing certain transactions - such as those related to the escrow funds placed with JLC, which the company reported in May had gone missing.

"The company's position, as advised by our solicitors from Rajah & Tann Singapore LLP, is to await the conclusion of the PwC audit and/or further information before deciding on what steps to take, and against who, to recover the Allied funds," Allied Tech has reiterated.