Rocked by allegations, Novena Global Healthcare board takes over running of firm from Loh cousins

Singapore

A GROUP of chafed investors in Novena Global Healthcare Group (NGHG) is moving to guard its interests on concerns about the company's accounts. Among these investors: Sinopharm Capital, the private equity arm of Chinese pharmaceutical giant Sinopharm.

On Friday, NGHG's board shot out a statement that it was "deeply concerned" by recent developments, and has set up a special committee to investigate allegations that the audit signatures on the firm's accounts were forged and to "restructure and scrutinise" its affairs.

"Neither Nelson Loh nor Terence Loh are part of this committee," it said in the statement that was disseminated by TSMP Law on behalf of the NGHG board.

It is believed that the board met on Friday and has been in contact with Mr Terence. The whereabouts of Mr Nelson in recent weeks are not known.

"NGHG is not wholly owned by the Lohs. The majority of the beneficial interest in NGHG is ultimately held by individual, private and institutional investors," the board said, adding that the firm is "wholly unconnected and unrelated" to the Bellagraph Nova Group and Catalist-listed Axington.

The Business Times understands that the board consists of four directors - apart from the Lohs - and represent the interests of Singaporean as well as Chinese investors, all of whom are vexed over the events unfolding at the firm.

Last month, the duo had reportedly made a £280 million (S$506.6 million) bid for Newcastle United via a company called Bellagraph Nova, controlled by them and their partner Evangeline Shen. The bid attracted some attention and led to multiple media reports uncovering inconsistencies in the images that the Lohs had projected about themselves and their group of companies. Several investigations into the Lohs and their companies are now ongoing.

The latest development comes in the wake of news that a Singapore unit of Ernst & Young lodged a police report last week alleging unauthorised use of its signatures on NGHG's financial statements. The Singapore police has said it is looking into the matter. NGHG's board said that it plans to appoint solicitors and will fully cooperate with the authorities investigating the allegations.

A source said: "These investors used to be silent partners. But now, they and the various stakeholders want to take control of the firm and all its subsidiaries to stabilise and rescue the businesses."

Last month, BT reported that several nervous individuals from Singapore, Thailand, Indonesia, Taiwan and China were among some 20 investors who wanted out, after marketing materials for Bellagraph Nova surfaced bearing doctored photographs featuring the Lohs and former US President Barack Obama. Some other claims made by Bellagraph Nova also turned out to be inaccurate.

The investors, who include key executives of a Singapore-based private equity firm, an American multinational technology company and a former investment banker at a big US bank, are understood to have invested some US$20 million in the firm.

Those familiar with the companies under the Lohs' stable say that NGHG, a holding company incorporated in the Cayman Islands, has some "real and good businesses" under its umbrella. Even so, they are unlikely to be reporting revenue in the US$1 billion range claimed by the duo in the past. The cousins had claimed that firm was slated for a listing on the Taiwan Stock Exchange in 2017.

The board said NGHG's subsidiaries continue to operate many medical and wellness businesses in Singapore, Taiwan and China, including health screening centres, aesthetic clinics, hair salons, day surgery centres and a dental clinic. The board has barred the firm and its subsidiaries from entering into any transactions from hereon without the nod of the "review & supervisory committee".

The police aren't the only ones looking into matters related to the duo. Last month, Singapore's Accounting and Corporate Regulatory Authority (Acra) told BT that it will take enforcement action against the Lohs after it was discovered that entities linked to them had not filed annual returns.

The Straits Times on Friday quoted an Acra spokesman that it was expanding its scope and looking into whether other related registered entities have complied with the requirements to hold annual general meetings and file annual returns.

A source close to the matter said: "It's a fog of war. The board (excluding the Lohs) doesn't know what's going on. It needs to figure things out first . . . whether there are any nasty surprises and what to do and cascade the action to the subsidiaries.

Right now, they are on top of the tree. They need to get down to the lower branches. They want to find a way to ensure the company is still sustainable and operational, and cut it off from the gangrenous parts".