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Best World extends AGM again to Oct 31 pending PwC independent review

BEST World International now has until Oct 31 to convene its annual general meeting (AGM), the mainboard-listed skincare product seller announced on Tuesday.

The Singapore Exchange's regulatory arm, SGX RegCo, on June 24 approved Best World's application for a four-month extension of time to hold the AGM. The firm had earlier extended its deadline to hold the AGM by two months to June 30.

This comes as PwC is conducting an independent review into Best World's business dealings as ordered by SGX in April, after a short-seller report questioned the accounting behind its profits and sales practices in China.

On May 13, SGX RegCo issued a notice of compliance to Best World. Among other things, it wanted PwC to expand the scope of its review to determine the veracity of Best World's sales in China under the export model from 2015 to 2018, and whether these were conducted on normal commercial terms.

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PwC was also ordered to report solely to SGX RegCo on the scope and all findings of its review. The independent reviewer had initially been told to report to both SGX RegCo and Best World's audit committee.

Best World said that it applied for the AGM extension until Oct 31 based on PwC's estimated timeline for completion of the expanded review. The review will not be completed by June 2019 as previously expected because the compliance notice significantly expanded the scope of the review.

Best World's board believes that the objective of the expanded review would be "better achieved" if the AGM is postponed until after the review is completed and the executive summary of PwC's key findings has been announced.

This would give shareholders more information on the group's export model and franchise model and allow them to clarify any questions they may have at the AGM, Best World said.

Given that trading in Best World shares has been suspended since May 9, the further time extension for the AGM will not adversely affect the trading in the shares or the interests of shareholders, the company noted.

SGX RegCo has been digging deeper into Best World's business dealings after the firm confirmed on May 13 that its biggest customer was owned by the brother-in-law of its chief executive Dora Hoan and also revealed more links between the two firms.

The customer, Changsha Best, was Best World's primary import agent in China until the middle of last year.

In the May 13 compliance notice, SGX ordered Best World to get Changsha Best and other import agents to hand over copies of their financial information, accounting and corporate records to SGX RegCo. Best World was also told to put SGX RegCo in contact with the import agents' customers, warehouses and delivery service providers.

Trading in shares of Best World will remain suspended until SGX completes its investigations.