SGX reprimands Tee International and its former CEO over failure to disclose claims

ENGINEERING company Tee International and its former chief executive officer and managing director Phua Boon Kin have been reprimanded by the Listings Disciplinary Committee (LDC) of the Singapore Exchange (SGX).

In a statement on Thursday (Jan 18), SGX said that the reprimand was for failing to disclose claims served to its subsidiaries, and for having unsatisfactory systems of internal controls and risk management.

The LDC brought six charges in total against the mainboard-listed company:

• Three charges were for failing to disclose claims served to its subsidiaries. These lapses contravened Mainboard Rule 703 (1)(a), with the disclosure of the claims necessary to avoid the establishment of a false market.

1) Claims served by “various creditors” to Tee International subsidiaries Trans Equatorial and PBT Engineering on or about Oct 19, 2020, for an aggregated amount of S$4,281,971.68. This represented 22.3 per cent of the company’s net asset value (NAV).

2) A claim from Fuji SMBE Technology served on Trans Equatorial for S$2,694,000 on or about Dec 2, 2020, representing around 13.9 per cent of the company’s NAV.

3) Two claims from Power-Link Engineering served on Trans Equatorial for a total of S$5,115,127.51 on or about Dec 16, 2020, representing 26.6 per cent of the company’s NAV.

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• SGX brought two charges – in accordance with Mainboard Rule 705(2) – for failing to disclose or provide commentary on the claims for the company’s financial statements in the half year ended Nov 30, 2020, and for the third quarter ended Feb 28, 2021.

• SGX also brought one charge of failing to have in place adequate and effective systems of internal controls and risk management systems to monitor the claims received, and to escalate matters to the board for timely disclosure.

According to LDC findings, Phua had failed to bring these claims to the attention of the board in a timely manner, with the summary of the above claims revealed to the board only on June 3, 2021.

SGX said that having regard to Mainboard Rule 1402 (6), Phua was himself also charged for causing the company to be in breach of the above-mentioned six charges.

He had been an executive director of the company since 2008 and was CEO and managing director since September 2019, and “at all material times” was also executive director of Trans Equatorial and PBT Engineering.

The LDC has required Phua to provide a signed, written undertaking to not seek any directorship on the board of directors, or role as a key executive officer of SGX-listed issuers for two years starting from Dec 11, 2023.

Tee International’s shares have been suspended from trading since June 2021.

On Jan 12, 2024, the company received a notification of delisting from SGX. Its application requesting a further extension of time until Mar 31 to submit its revised trading resumption proposal was rejected by SGX.

Tee International had formerly been reprimanded by SGX in 2021 for unauthorised remittances.