Vin’s Holdings’ probe confirms fraud risks linked to S$44,300 in irregular transactions involving ex-staff

[SINGAPORE] Vin’s Holdings on Tuesday (Jun 2) announced the completion of a special investigation audit, which confirms earlier findings of fraud risk indicators present in connection with certain irregular transactions linked to a former employee.

The Catalist-listed company opened an investigation after discovering irregular transactions in April, involving a S$44,300 sum paid to an entity for services it purportedly rendered.

The entity was found to be wholly owned by an unnamed former staff, who overrode internal controls to execute letters of engagement and payment to the entity.

The final report of the audit, dated May 11, further noted that the company’s existing policies and procedures were “largely in place”.

However, control breakdowns arose primarily because the former employee in question circumvented and overrode those established controls “by virtue of his senior position”.

Vin’s Holdings said that the report “does not constitute a legal determination of fraud, misconduct or liability” and that “procedures performed do not constitute an audit or assurance engagement conducted in accordance with auditing standards”.

An external auditor, who worked with the company to assess the impact of the irregular transactions, has also confirmed that they do not have material impact on previously issued financial statements for FY2025, said the group.

The company’s board, as well as the audit and risk management committee, has accepted the internal auditor’s recommendations laid out in the report.

Building on the interim measures disclosed in an Apr 30 announcement, Vin’s Holdings said its management has implemented several additional measures to further strengthen its control environment as of Tuesday.

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Vin’s Holdings announces probe into irregular payments linked to ex-employee

The measures include implementing:

• a pre-employment due diligence and conflict-of-interest framework to enhance onboarding declarations, including mandatory independent background checks for senior hires;
• segregation of duties to reinforce established policies, to ensure the separation of various roles;
• procurement and payment controls to reinforce established policies on competitive quotations, the use of standardised quotation comparison forms, the alignment of payment amounts with approved quotations or contracts and prior CEO approval for all referral fees;
• vendor onboarding and master data controls to automatically detect potential links between vendor records, as well as employee and director information; and,
• monitoring and refresher training, with bi-annual reviews and exception reporting on procurement-related transactions, alongside refresher training on the group’s whistle-blowing procedure and conflict-of-interest policies.