Auditor issues disclaimer on finances of Loh cousins' Axington

AXINGTON on Thursday said its independent auditor Foo Kon Tan LLP issued a disclaimer of opinion on its financial statements for the financial year ended Dec 31, 2020.

The basis for the disclaimer of opinion relates to Axington's other receivables, cash in banks, other payables, impairment losses on plant and equipment, other expenses, gain on disposal of subsidiaries and discontinued operations, opening balances and comparative information, as well as the appropriateness of Malaysia's ringgit as the functional currency.

Foo Kon Tan LLP said in its independent auditor's report dated Wednesday that it was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements.

On the independent auditor's report, Axington's board said these issues arose during a period in which the group underwent significant changes in its board composition and key management personnel, which led to challenges in obtaining the necessary information for the conduct of the audit.

Given that the company has minimal activities at present, the board believes its existing set-up and control measures in place are adequate to manage Axington's accounting, financial reporting and compliance functions.

Matters highlighted in the independent auditor's report pending resolution include the outstanding balance of S$1.1 million from the company's issuance of placement shares on Aug 17, 2020, as well as unknown receipts by the company on Aug 19, 2020.

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Foo Kon Tan said it was unable to ascertain the purpose and rationale of two receipts of S$125,000 and S$200,000 received from a company on Aug 19, 2020.

For these matters, the board said Axington is seeking legal advice and considering all available options to resolve them.

Catalist-listed Axington is the company linked to the Bellagraph Nova (BN) saga last year. It is now a cash company and faces the risk of delisting if it does not acquire a new business within a year, it said in a bourse filing on April 6.

On June 4 this year, the company redesignated independent director Ang Chiang Meng as its executive director to facilitate the pursuit of corporate initiatives given its cash company status. The board also outsourced its finance function to a third-party service in the interim, amid various internal controls and risk management policies.

Formerly a professional-services group, Malaysia-incorporated Axington has been mired in difficulty after Singaporean businessmen and cousins Nelson Loh and Terence Loh, co-founders of BN Group, bought out the firm in July.

The Loh cousins came under the spotlight for their business dealings after they announced plans for a takeover bid for English football club Newcastle United. It was later revealed that BN Group's marketing materials had been doctored, among other inconsistencies.

Axington suspended the trading of its shares on Aug 31, 2020, following certain developments in the media over its controlling shareholders.

READ MORE:

• Axington now a cash company, faces risk of being delisted
• Yet another twist in Singapore's Loh cousins saga
• Scandal-hit Bellagraph Nova says still bidding for Newcastle