THE board of Ipco International said on Wednesday that most of the S$1.58 million raised from a share placement last year has been diverted to working capital instead of a real estate project as originally planned.

The intended use of the placement proceeds was 50 per cent for the purchase of equipment and development of land in Seattle through Capri Investments, the group's real estate development subsidiary, and 50 per cent for working capital.

In actual fact, close to S$1.34 million was used for working capital purposes, including payroll. Only S$187,000 has gone towards Capri Investments and a remaining S$61,000 was unspent as at March 30.

In early January, former executives of the company diverted the proceeds to working capital, Ipco's board said. It did not name these former executives.

Because the actual use of proceeds is not in accordance with the intended use as earlier stated, the board said it has reported the alleged non-compliance to the Singapore Exchange's (SGX) regulatory officers.

"The board is investigating the break-down of corporate governance by former executives," it wrote in an exchange filing on Wednesday.

At the end of October last year, Ipco had net current liabilities of S$6.8 million. Last month, Ipco's board wrote to the SGX requesting more time to produce the unaudited accounts for the quarter ended Jan 31, 2018.

Australian investor James Blytham joined Ipco as chief financial officer in March after putting S$1.58 million into Ipco through the placement.

Interim chief executive Goh Hin Calm quit last month while executive director Carlson Smith was ousted.