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Midas' board says company cannot operate as going concern; auditors turn their back on past years' work

MIDAS Holdings' board has declared that the company cannot operate as a going concern, while the firm's auditors said separately that its auditor reports for Midas from 2012 to 2016 can no longer be relied upon.

The manufacturer of aluminium alloy extrusion products had received two letters of demand on Mar 9 and April 16, respectively, for amounts of 87.3 million yuan (S$18.29 million) and US$6.9 million.

In relation to claims in the second letter, it also received a writ of summons from Hong Kong High Court on April 25.

The company's board noted that no additional funds can be remitted to the company given that its primary subsidiaries are embroiled in litigations and facing claims.

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The company's current cash position will not be able to satisfy the claims made if the court should rule in the claimant's favour, it added.

"As such, the board, after assessing the current situation opine that the company cannot operate as a going concern."

Separately, the company's auditors, Mazars LLPs, has sent a letter to the firm, stating that in light of the findings in the course of their audit work for the financial year ended Dec 31, 2017, and recent developments in the company, the auditors' reports it issued for the 2012-2016 financial years may no longer be relied upon.