You are here
One-time charge at CSE likely to drag group into the red for Q2
CSE Global said it is expected to recognise a one-time exceptional charge of US$12 million.
Though this is a non-operational item, the one-time charge is likely to result in a net loss for the second quarter and a drag on the full year 2017 performance, even as its core business is likely to remain profitable.
CSE explained that this is due to a settlement agreement between wholly owned unit CSE-Transtel Pte Ltd and the US Department of the Treasury's Office of Foreign Assets Control (OFAC).
Under the terms of the settlement agreement, CSE and CSE Transtel agreed to pay US$12 million to settle its potential civil liability for alleged violations of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations.
The alleged violations from June 2012 to March 2013 arose from payments, in US dollars, for non-US goods and services lawfully rendered by CSE Transtel through non-US third party vendors to Iran or persons located in Iran.
"After due and careful consideration, CSE and CSE Transtel have agreed to settle with OFAC, the matter of the alleged violations as the alternative would have been a costly and lengthy litigation in the US, which would take up much of management time and resources, the outcome of which is not at all certain," CSE said.
"As part of the settlement process, OFAC has released and discharged CSE and CSE Transtel permanently, without any finding of fault, from any and all civil liability in connection with the alleged violations arising under the legal authorities that OFAC administers."