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Sakae mulls independent review of auditors' disclaimer

It also elaborates on the differences in views that led to Foo Maw Shen resigning as an independent director


SAKAE Holdings is considering an independent review of the auditors' disclaimer on its FY2019 financial statements, the mainboard-listed company told the bourse on Friday.

The Singapore Exchange had asked Sakae to elaborate on the reasons for the resignation of independent director Foo Maw Shen on Wednesday.

In a filing on Thursday, Sakae had cited "differing views on the follow-up action" to the auditors' disclaimer as the reason for Mr Foo's departure.

Sakae responded that the difference in views relate to a specific portion of the disclaimer, involving a sum due from a company owned by another shareholder of Cocosa Export, a Chilean firm Sakae had invested in.

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Sakae's board had believed that its investment would be unrecoverable and decided to fully impair goodwill and other receivables associated with Cocosa.

But Sakae's independent auditors flagged a lack of audit evidence, and deemed that a full loss allowance on the receivables had not been made.

"The board is still in the process of resolving the differences, exploring options available to them, including but not limited to commissioning an independent review of the auditors' disclaimer opinion on the FY2019 financial statement," it said.

The bourse also queried Sakae on why the auditors had initially issued their report on Oct 11, but subsequently issued "revised Auditors comments" dated Oct 14.

Sakae responded that the date was changed due to an amendment made to a note in its FY2019 financial statements, relating to the amount due from Cocosa. The change was made "to be consistent with management's understanding", Sakae said.

Separately, Sakae appointed a new independent director, Nicholas Ngoh, on Friday. Mr Ngoh works as the principal legal counsel at the Singapore Manufacturing Federation (SMF), where he is also the director for corporate and council affairs, and membership and industry groups.

Sakae chairman Douglas Foo is the president of the SMF. But Mr Ngoh does not report to Mr Foo in his job at SMF, Sakae said.

Shares of watch-listed Sakae last closed at S$0.09, before a trading halt was called on Thursday.

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