Altered bank statement uncovered in Singapore Kitchen Equipment transactions
AUDITORS probing a series of eight flagged transactions in the accounts of Catalist-listed Singapore Kitchen Equipment 5WG (SKE) have reported the company to the Minister for Finance, the firm revealed on Thursday.
In a regulatory filing that gave an update to an additional review called after the audit of its financial statements for the year ended Dec 31, 2020, the company disclosed that this complaint was filed on July 30, 2021, after an altered bank statement was discovered when auditors examined the documents underlying these transactions.
These transactions, which took place between SKE and its major shareholder QKEH, were listed in a debit note QKEH issued to SKE that amounted to some S$1.4 million. Approval for payment of this debit note had not been sought from SKE's board.
This sum was subsequently refunded to SKE in March and August this year, following the discovery of these irregularities, SKE said.
Where the money went: bonuses, donations & S$295,000 for Facebook advertising
Slightly more than half this sum (S$741,721.55) went to employee bonuses paid out in January 2019. A sum of S$10,800 was spent on a staff incentive trip to Nepal in February 2019, and there was also a payment for office rental amounting to S$50,666.62 in September 2018, apart from two donations made in April 2018 and February 2019 coming up to a total of S$69,188.
There was a substantial amount of some S$323,140, however, paid to an unrelated third party called Activa Media, which purportedly provided Facebook advertising (which it charged S$295,320 for) as well as website creation and hosting services (which it charged S$27,820) to SKE's wholly-owned subsidiary Q'son Kitchen Equipment.
"Certain employees" altered a bank statement without the CEO's or two executive directors' knowledge
In reviewing the underlying documents for these transactions, SKE said its auditors discovered that a bank statement belonging to QKEH that was provided to the auditors had been altered.
According to Rajah & Tann, the legal firm appointed by SKE to review the transactions and provide advice to the company, "certain employees of SKE had altered a bank statement and other documents unilaterally, without the instructions from, and knowledge and approval by the other two Executive Directors including the CEO".
However, its draft report also said there is so far no evidence to suggest that this was done to conceal criminal breach of trust or fraud, SKE emphasised.
Irregularities reported to Minister for Finance
SKE was reported to the Minister for Finance by its auditors on July 30 in accordance with the Companies Act, which states that "if an auditor of a public company or a subsidiary corporation of a public company, in the course of the performance of his duties as auditor, has reason to believe that a serious offence involving fraud or dishonesty is being or has been committed against the company by officers or employees of the company, he shall immediately report the matter to the Minister (for Finance)".
SKE has urged "all parties" to refrain from speculation over the contents of its auditors' report to the minister.
Trading of SKE's shares has been halted since August 2. SKE has also obtained permission from the Singapore bourse to delay its annual general meeting to Sept 14, and to delay the release of its H1 2021 financial results till Oct 24.
READ MORE:
