BDO 'not able to fully verify' Dapai transactions due to incomplete records

WATCHLISTED backpack maker Dapai International Holdings said an agreed-upon audit procedure report by accounting and audit firm BDO LLP investigating allegations of improper transactions has been completed.

BDO was not able to fully verify whether the transactions referred to in the allegations have been carried out and properly recorded, due to incomplete documentation.

"This was mainly due to the review period being more than five years ago," BDO said.

The issue relates to an initiative undertaken by Dapai in late 2009 to open 500 new retail outlets carrying the company's products.

BDO was engaged in April this year to undertake an independent review of allegations that various transactions between the company, certain sales distributors, and renovation contractors were fictitious or misrepresented.

Concerns BDO highlighted in the report included a possible breach of local regulations on document retention, potential inaccuracies in announcements the company posted on the Singapore Exchange, and a lack of internal controls over supplier payments, payments of pre-paid rentals to distributors, and monitoring of outlets.

The company's audit committee, together with the board, has engaged forensic accounting firm KordaMentha Pte Ltd to further review and follow up on the outstanding matters arising from the report.

Dapai last traded at S$0.008.