Scomi En­ergy forms probe com­mit­tee

Com­pany to in­ves­ti­gate re­lated party trans­ac­tions, ad­vances

The Star Malaysia - StarBiz - - News -

KUALA LUMPUR: Scomi En­ergy Bhd has formed a com­mit­tee to in­ves­ti­gate cer­tain re­lated party trans­ac­tions (RPT) and ad­vances made with­out prior au­tho­ri­sa­tion from the board.

“As the in­ves­ti­ga­tion is still on­go­ing, the board is un­able to pro­vide a state­ment as to whether the pro­vi­sion of the ad­vances were fair and rea­son­able or to the detri­ment of the com­pany or its share­hold­ers,” Scomi En­ergy said in a fil­ing with Bursa Malaysia yes­ter­day.

Scomi En­ergy said it had de­ter­mined that the com­pany had omit­ted to an­nounce cer­tain RPT in ac­cor­dance with the Main Mar­ket List­ing Re­quire­ments.

These RPTs re­late to sums that have been ad­vanced to its hold­ing com­pany, Scomi Group Bhd and its sub­sidiaries over a pe­riod of two years, from June 2016 to June 2018, or the af­fected pe­riod.

Given the na­ture of share­hold­ing be­tween the com­pany and Scomi Group and the com­mon di­rec­tors be­tween these two listed en­ti­ties, these ad­vances were deemed to be re­lated party trans­ac­tions.

“The to­tal sum ad­vanced is RM64.33mil of which RM19.39mil re­lated to a shared ser­vice agree­ment be­tween the com­pany and Scomi Group and is not re­garded as a re­lated party trans­ac­tion pur­suant to para­graph 10.08(11)(k) of the MMLR.

“The bal­ance of RM44.94mil (the ad­vances) con­sti­tutes re­lated party trans­ac­tions, of which the Scomi Group of Com­pa­nies has, over the af­fected pe­riod, re­paid RM9.7mil,” Scomi En­ergy said.

Dur­ing the af­fected pe­riod, the Scomi En­ergy’s board be­lieved that the amount due from Scomi Group re­lated to the shared ser­vice agree­ment be­tween the com­pany and the Scomi Group.

“On be­ing in­formed that the ad­vances had been made with­out prior au­tho­ri­sa­tion from the board, the board im­me­di­ately com­menced an in­ves­ti­ga­tion into the mat­ter to ob­tain fur­ther in­for­ma­tion re­lat­ing to the ad­vances,” Scomi En­ergy said.

Scomi En­ergy’s board has en­gaged a firm of so­lic­i­tors to con­duct a re­view of the trans­ac­tions in ac­cor­dance with a pre­lim­i­nary re­port is­sued.

As a re­sult of the pre­lim­i­nary re­port from the so­lic­i­tors in Novem­ber 2018, the board ini­ti­ated an in­ves­tiga­tive re­view of the trans­ac­tions which in­volved the ad­vances, the Bursa fil­ing said.

A third party firm of in­de­pen­dent au­di­tors would be tasked to un­der­take an in­quiry in or­der to iden­tify is­sues and risks that arose.

The board will take steps to im­ple­ment ad­di­tional pro­to­cols to strengthen cor­po­rate gov­er­nance and en­hance man­age­ment ac­count­abil­ity and trans­parency.

“In ad­di­tion, the scope of the in­ves­tiga­tive re­view is to de­ter­mine the cul­pa­bil­ity of per­son or per­sons re­spon­si­ble for the mak­ing of the ad­vances,” the fil­ing said.

At the same time, the Scomi En­ergy board has un­der­taken some im­prove­ment and re­me­dial ac­tions.

These ac­tions in­clude re­view­ing the man­age­ment struc­ture and ter­mi­nat­ing shared ser­vices agree­ment be­tween the com­pany and Scomi Group.

It is also re­view­ing the re­port­ing and es­ca­la­tion struc­ture from the man­age­ment to the board, and en­sur­ing that the chief fi­nan­cial of­fi­cer is di­rectly ac­count­able to the board to re­port on all ma­te­rial mat­ters, in­clud­ing any pro­posed re­lated party trans­ac­tions.

On be­ing in­formed that the ad­vances had been made with­out prior au­tho­ri­sa­tion from the board, the board im­me­di­ately com­menced an in­ves­ti­ga­tion into the mat­ter. Scomi En­ergy

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