Judicial managers flag issues at Jurong Tech
(SINGAPORE) Judicial managers of Jurong
Technologies Industrial Corp have found 'questionable' accounting
and business practices at the company that would significantly
impact its finances, the company said last night.
The managers, Tam Chee Chong and Keoy Soo Earn of Deloitte &
Touche, 'have forwarded their findings to the regulatory
authorities for their consideration', according to a brief
statement.
They said they found the questionable 'accounting transactions,
practices and matters' while reviewing the company's accounts and
business practices.
The judicial managers are finalising the company's financial
statements for FY2008 and taking into account the adjustments that
will be made arising from the questionable transactions, the
statement said.
The release of the full-year results have been delayed several
times and the latest extension gives the company, a contract
manufacturer, up till Aug 14 to finalise its accounts.
No other details were given and it is not known if the
questionable practices are related to 'alleged irregularities' in
the administration of receivable financing facilities, which the
company's auditors Ernst & Young uncovered last December.
Jurong Tech said then that the irregularities would have no
'material financial impact to the unaudited results' for the
company's third quarter to Sept 30, 2008.
It said that two areas of the balance sheet are affected. Trade
payables and accruals should have read a higher S$111,376,000
instead of S$106,383,000, and amounts due to banks should be a
lower S$277,708,000 instead of S$282,701,000, the company said.
Mr Tam and Mr Keoy were appointed as judicial managers in
February after at least seven banks demanded repayments of loans
amounting to more than US$200 million.
The banks included Rabobank International, Belgian outfit KBC,
ABN Amro Bank, Sumitomo Mitsui Banking Corporation, United Overseas
Bank, OCBC Bank and DBS Bank.
Judicial management happens when a court appoints a manager to
direct the affairs of a company in trouble. Under Section 227A of
the Companies Act, this can be when a company is unable to pay its
debts but there is some chance of keeping the business going
without having to wind it up.
Jurong Tech's judicial managers have been searching for white
knights or investors in the company but have so far received no
firm offer, according to the latest monthly updates.
Meanwhile, they have already sold off some of the company's
assets, including a Tuas factory for S$3.53 million with a
remaining lease of about 17 years, and unused factory land and
building in Malaysia for RM3.5 million (S$1.4 million).
These are public listed companies.
Without the accountants, the fiscal reports cannot be fudged. The
ring leaders can't do anything if the accountants say 'no'. That's
why they are labelled as 'professionals along with doctors, lawyers
and engineers'.
One Enron case and another Worldcom.. why do we even bother to
govern these accountants as professionals...