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Rich Capital receives S$1.75m of S$2m advance payment guarantee from associate
CATALIST-LISTED Rich Capital on Tuesday said it had on July 22 received S$1.75 million from associate company Rich-Link Construction (RLC), after RLC offered to return a S$2 million advance payment Rich Capital had paid on behalf of PT Oxley Karya Indo Batam. It will continue to demand for the balance of S$250,000 to be refunded, pending the furnishing of a performance bond.
PT Oxley Karya Indo Batam (OKIB) - a joint venture company between PT Karya Indo Batam (KIB) and Oxley Batam Pte Ltd, an indirect subsidiary of Rich Capital - is responsible for the development of a Batam development project.
The advance payment guarantee was previously reported to be put on hold pending new developments.
In the latest regulatory update, RLC said it would pay S$1.75 million to Rich Capital, which has been received; and that the balance of S$250,000 has already been deducted by an independent project consultant for the value of work done by RLC up to April 30. The repayment renders the advance payment guarantee to be provided by RLC to OKIB unnecessary.
Rich Capital had earlier responded to Singapore Exchange (SGX) queries on why it did not recall the S$2 million advance payment paid on behalf of OKIB to RLC, which could potentially provide comfort to its working capital in light of an impending going concern issue raised by auditors at a recent audit committee meeting.
RLC - an associate company of its sole director and controlling shareholder Wang Zhen Wen - was awarded a S$125 million contract by the group’s indirectly owned subsidiary OKIB for a phase of Rich Capital’s property development project in Batam, Indonesia.
Mr Wang is also Rich Capital’s non-independent non-executive chairman and its 29.5 per cent shareholder, and the president director of OKIB.
His roles in these companies had on multiple occasions prompted queries from the SGX investigating potential conflicts of interest. To this, Rich Capital said he was not the sole representative of the group and Oxley Batam Pte Ltd to PT OKIB when the decision on the S$2 million advance payment was made.
Mr Wang has also since offered to step down from his role in OKIB to facilitate the resolution of these matters.
Rich Capital shares have been voluntarily suspended since June 27, following a trading halt called on June 24. Shares of the company last closed up 0.2 Singapore cent, tripling to 0.3 cent on June 21.