Pine Capital appoints independent reviewer to look into allegations of lapses, conflict of interest

CATALIST-LISTED financial services firm Pine Capital Group has appointed KordaMentha as the independent reviewer to investigate numerous allegations received from various parties since January this year, it said in a Singapore Exchange (SGX) filing on Monday night.

On March 21, Pine Capital had said it was in consultation with SGX to appoint an independent reviewer to look into the allegations of potential conflict of interest and possible lapses in internal control . The company also requested on the same day that the trading of its shares be suspended.

Among other things, KordaMentha will review the allegations and Pine Capital's internal controls, policies and procedures surrounding the operations of its sole operating subsidiary, Advance Capital Partners Asset Management (ACPAM).

KordaMentha will also identify and make recommendations on any internal control lapses and potential breaches or non-compliance of rules, laws and regulations, and on the parties responsible for the respective potential breaches or non-compliance.

It will provide regular updates of its findings to the audit committee of Pine Capital, SGX, and Pine Capital's sponsor, Asian Corporate Advisors. KordaMentha is to prepare a formal written report to be submitted to the audit committee, SGX and the sponsor when the review is completed.

Pine Capital will release a bourse announcement containing KordaMentha's key findings when they are available.

The reviewer's appointment comes shortly after Pine Capital's plans to buy a 51 per cent stake in Hong Kong-based asset management firm Silver Tree Hong Kong for HK$2.55 million (S$440,000) in shares appeared to have hit a snag. Pine Capital said on June 12 that it received two letters of demand from solicitors acting for Silver Tree's sole shareholder, seeking to terminate the deal.

Separately, the Monetary Authority of Singapore (MAS) had in April reprimanded ACPAM's then-CEO and director Tan Choon Wee for, among other things, failing to discharge his duty and function. This was after the fund management firm continued to be late in its submissions to MAS after having been already reprimanded in July 2018 for being repeatedly late in its regulatory submissions. 

MAS then directed ACPAM in May to suspend all its fund-raising activities and subscription activities.

Pine Capital had, in April, called for an extraordinary general meeting (EGM) to remove Mr Tan and two others from the board of ACPAM.

Pine Capital said it did so because of the allegations it had received - which KordaMentha is now reviewing.

Mr Tan had quit as Pine Capital interim CEO and chairman on March 1. The two others, independent directors Chong Chee Hoong and Roy Ling, resigned on March 18 because they could not obtain sufficient information in a timely manner to discharge fiduciary responsibilities and were also unable to make an assessment on the state of affairs of the group.

Mr Tan then sued the group, claiming that ACPAM's affairs had been conducted in a manner prejudicial to him; Pine Capital subsequently commenced its own legal proceedings against him and other former directors and officers of ACPAM.

Mr Tan also appealed against the High Court's decision to allow the April 5 EGM, but later lost the appeal. Pine Capital said in June that it will continue to seek legal advice and take necessary steps to defend the action.