Missing Epicentre chairman involved in rogue loans of S$28m: special auditor
Jude Chan
KENNETH Lim Tiong Hian, the executive chairman and acting chief executive officer of Catalist-listed Epicentre, was involved in loans of about S$27.6 million taken purportedly for the former Apple reseller – loans which the company has no records of receiving, according to a report released on Monday (Aug 8) by special auditor Ernst & Young Advisory.
In the special audit report, EY said Lim and some other individuals had caused companies which were not part of the Epicentre Group to enter into loan agreements with various parties.
Some of these agreements bore Epicentre’s stamp. However, Epicentre’s accounting and banking records did not record receipt of these funds.
Epicentre said Lim has been uncontactable since May 2019, and that it did not know his whereabouts.
The special auditor also found that some S$8.1 million of the S$40.7 million of loans that Epicentre did take up were not recorded in the group’s accounting and banking records.
In addition, 3 loans amounting to S$2.7 million were not duly approved in accordance with the company’s approval requirement.
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EY also found that Epicentre may have paid Lim over S$1 million “without basis” in 2019.
The special auditor said Lim had received S$1.2 million from Epicentre at the end of FY2019 as repayment for loans made to the group. However, based on information available to EY, Epicentre had only received S$200,000 in these purported loans directly from Lim.
“In view of the factual findings detailed in this report, we suggest that the judicial managers or the company seek legal advice on whether Lim has breached his fiduciary duties as a director and whether the company has breached any Singapore Exchange listing rules,” EY said in its report.
EY identified several potential breaches of the listing rules, including on loan-related disclosures and lapses in the company’s internal controls.
In a separate filing on Monday, Singapore Exchange Regulation (SGX Regco) said it will refer EY’s findings to the relevant law enforcement and other authorities.
The Commercial Affairs Department (CAD) and Monetary Authority of Singapore (MAS) in January 2020 had ordered Epicentre to produce certain documents and information in relation to an offence under the Securities and Futures Act
CAD had also interviewed Epicentre independent director Lai Choong Hon.
Epicentre has been under judicial management since September 2019.
In November 2021, the judicial managers filed applications for the company to be placed in liquidation.
The High Court granted the winding-up application in January 2022, and the liquidators have announced their intention for the company to be delisted.
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