Another Catalist-listed company is in hot water after a special audit report found numerous instances of lapses in corporate governance, internal controls and possible non- compliance with listing rules.
Yesterday's report came after a tumultuous year for Cedar Strategic Holdings. In June, a group of investors ousted its entire board.
After the new board took over, the directors found the firm - which focuses on China real estate - had significant debts and no money.
In July, the directors appointed Baker Tilly Consultancy to conduct an independent review of the company's accounts for the 2013 and 2014 financial years to uncover any potential irregularities.
In its report, the auditor highlighted six key areas of lapses, including investment deals where millions of dollars were uncollected or unaccounted for and instances of overpayment to various people such as former executive directors and management.
During the period reviewed, the company bought and/or sold several investments, including selling its titanium dioxide business, buying and subsequently proposing to sell Trechance Group, buying and selling Yess Le Green and West Thames, and buying Futura.
The titanium dioxide business was sold for 180 million yuan (S$40 million), but the proceeds remain uncollected, and there was no written evidence that the buyers were capable of paying for the purchase.
In another deal, in 2014, it raised $4.6 million in new share placements to pay for the purchase of Trechance Group, which has business in China. But the auditor was unable to ascertain if $3.6 million of those proceeds had been paid to the company and if it was used to redeem the bonds issued as part of the purchase transaction.
Also, former executive chairman Charlie In Nany Sing and chief financial officer Alice Lim were found to have made unauthorised payments to themselves.
The directors said yesterday that they are actively looking at the issues faced by the company, and have appointed professionals, including Singapore law firm Drew & Napier and Shanghai law firm Yuan Tai, to look at various matters.
The firm reported a 253 million yuan loss for the year ended Dec 31, 2014, in a separate filing to the Singapore Exchange yesterday.