Transcorp just days away from going-concern troubles

Singapore

TRANSCORP Holdings, which sells cars but not enough of them to turn a profit, said on Tuesday night that it will face going-concern issues unless it can raise S$1 million to pay its debts and liabilities by the end of June.

"The group is not generating sufficient cashflow from its operations," the company said in response to queries from the Singapore Exchange. "It thus has to raise funds of S$1 million to pay its debts and liabilities by the end of June 2019."

The Catalist-listed firm with a market cap of S$4.8 million said on June 10 that it was speaking to potential investors, but no definitive agreement had been signed.

Non-executive chairman Vincent Tan said he had no further comments when approached by The Business Times on Wednesday.

Meanwhile, Transcorp is struggling to recover S$8.6 million in deposits paid to two entities owned by people with links to Transcorp.

It is trying to recover S$6 million that it paid to a company held by Cheng MingMing for a property project in China that it has since cancelled. Madam Cheng is a 24 per cent shareholder in Transcorp.

Transcorp is also trying to recover S$2.6 million in advanced deposits paid to a car supplier, Car Profile.

Goh Chin Soon, former executive chairman of Transcorp, is a deemed shareholder of Car Profile.(Please see clarification note) Mr Goh is the spouse of Chu Wan Zhen, who owns a 26.2 per cent stake in Transcorp.

Transcorp is "in detailed discussions with its lawyers on affirmative legal action" to recover both the deposits, it said last month.

Separately, Transcorp paid S$292,469 to Ace Financial Services last month to resolve a cancelled financing arrangement for a car that Ace sold to a customer.

Maybank cancelled the financing because the documents provided by Transcorp subsidiary Regal Motors to support the application for a hire purchase had allegedly been forged.

Ace was forced to pay Maybank when the bank cancelled the hire purchase agreement, so Transcorp had to buy back the car from Ace. Maybank's customer was Madam Chu.

A police report has been filed and Transcorp has since sold the car to a third party buyer for the same price, it said.

Disciplinary action has also been taken against a staff member of Regal Motors who was involved in the preparation of the documents.

The manager's signature was not identifiable on the supporting documents, Transcorp said.

Ace Financial Services is owned by Keith Oh Chee Tat. Mr Oh also owns Motor Megamall, an online car marketplace. Transcorp paid S$1.5 million for a 10 per cent stake in Motor Megamall last year.

Kevin John Chia, a non-executive non-independent director of Trans-corp, is also a director of Ace.

Clarification note: An earlier version of this story stated that Car Profile is owned by Mr Goh Chin Soon. Transcorp has clarified that Car Profile is in fact owned by Mr Koh Tuck Seng. Mr Koh was not previously named in Transcorp's responses to SGX's questions about Car Profile. Transcorp independent director Vincent Chia explained: "We did not see the need to name the supplier in the first place."