Tee International to wind up Trans Equatorial Engineering on cash flow issues

ENGINEERING services company Tee International M1Z : M1Z 0% has started winding up its wholly-owned subsidiary Trans Equatorial Engineering on cash flow issues.

In a bourse filing on Thursday (Dec 16) night, the group said it has decided to proceed with the creditors' voluntary liquidation of the subsidiary as it could not pay its debts.

Earlier this month, Tee International had disclosed that Trans Equatorial had 136 claims against it amounting to S$128.9 million as at Nov 29.

In that same filing, Tee International revealed as well that it faces 3 claims amounting to about S$13.7 million, and that its other wholly-owned subsidiaries owe money as well.

PBT Engineering has 55 claims amounting to S$9 million, while its Malaysian subsidiary Tee E&C Malaysia has 13 claims amounting to RM5.9 million (S$1.9 million), it noted.

These claims were principally trade-related, arising from clients and subcontractors and the supply of goods and services to the 3 subsidiaries, Tee International had said.

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Trans Equatorial was incorporated in 1980 and is mainly involved in the business of installing industrial machinery and equipment. It also provides mechanical engineering and electrical services.

Oon Su Sun and Lin Yueh Hung of RSM Corporate Advisory were appointed as Trans Equatorial's provisional liquidators.

The group on Thursday declared that none of its directors, controlling shareholder or substantial shareholders has any interest, direct or indirect, in the voluntary liquidation of the subsidiary, save for their shareholdings in Tee International.

The news followed a public reprimand of Tee International and 2 of its former C-suite executives for breaching mainboard listing rules.

On Dec 3, the Listings Disciplinary Committee of the Singapore Exchange said the company had failed to control unauthorised remittances and disclose in its annual report - for the financial year ended May 31, 2019 - requisite information on interested person transactions.

This involves unauthorised remittances of money between its former executive director and group chief executive Phua Chian Kin, Oscar Investment, PBT and Trans Equatorial. Oscar is an investment holding company wholly and beneficially owned by Phua.

It was revealed that Phua had used the remittances to settle his personal debts, although he had on multiple occasions said the remittances were for business purposes.

Trading in Tee International's shares has been suspended since June.

READ MORE: 

• Tee International's Q3 net loss widens to S$6.4 million
• Tee International names new CFO after predecessor leaves amid probe
• SGX committee raps Tee International and its former C-suite execs for breaching rules