USP appoints new CEO after auditor flags going concern doubts

MAINBOARD-LISTED USP Group has appointed Lim Boh Soon as chief executive officer (CEO) and executive director.

This came days after independent auditors flagged a material uncertainty in the company's fiscal 2019 results which may cast doubt on its ability to continue as a going concern.

Dr Lim, 63, has commenced his role as CEO on Monday. His appointment as executive director will be effective from Oct 1, USP said in a bourse filing on Tuesday.

He replaces interim CEO Kan Bright Pan, who was appointed to the role in December 2018. Meanwhile, Mr Kan will resume his position as chief technical officer of USP's marine business.

Dr Lim is the founder-owner and managing director of Arise Asset Management, as well as a venture partner at TPT Corporation. He is also an independent non-executive director at OUE Commercial Reit, Jumbo Group and Tomi Environmental Solutions.

USP said that Dr Lim used to be a director at Across Asia Limited, which was investigated by the Securities and Futures Commission of Hong Kong for breaching certain disclosure obligations. Although Dr Lim was one of the persons under investigation, the commission did not name him as a specified person when it commenced its proceedings after the probe. Therefore, Dr Lim was not a party to the proceedings, and the commission did not take disciplinary action against him nor was he warned or reprimanded.

In a bourse filing on Saturday, independent auditors RSM Chio Lim LLP noted that USP's total current liabilities exceeded total current assets by S$15.5 million for the year ended March 31, and that the company had incurred a net loss of S$23 million.

In response, USP's board said on Saturday that it believes the group can continue as a going concern. The board cited several reasons, including that USP had obtained written agreements from the bank on June 27 to accommodate the breach of loan covenants on a one-off basis for fiscal 2019.

The company also disclosed on Monday night several discrepancies between its unaudited and audited financial statements for fiscal 2019. These included a S$21.3 million increase in other losses, from S$124,000 in the unaudited statements to S$21.4 million in the audited statements, mainly due to the reclassification of S$19.4 million from exceptional items.

Watch-listed USP operates in the oil trading, marine equipment trading, and property development segments.

Its shares were trading at 3.5 Singapore cents as at 1.21pm on Tuesday, down 0.8 cent or 18.6 per cent.