Precision engineering firm Allied Technologies will not be buying construction and dormitory operator Aik Chuan Construction and its subsidiaries, it said yesterday.
Allied Tech and Mr Lim Yew Ming, who wholly owns Aik Chuan Construction, have mutually terminated their memorandum of understanding (MOU) for the proposed acquisition. Both parties entered into the MOU on May 8 after Mr Lim sent a letter of intent for the proposed $130 million deal that could result in a reverse takeover.
The proposed acquisition was subject to the execution of definitive documents, including a conditional sale and purchase agreement.
No definitive documents were entered into with respect to the proposed acquisition, Allied Tech said in a Singapore Exchange filing.
The proposed deal was to be settled by tranches of $30 million and $50 million in cash, with the balance from an issue of new Allied Tech shares.
The deal's termination comes after news that $33 million has gone missing from the clients' account with boutique law firm JLC Advisors.
The funds are believed to belong to Allied Tech. A senior lawyer at JLC Advisors has also become uncontactable, it was reported yesterday.
Allied Tech noted on May 8 that its auditors had flagged some observations, including $33.4 million being held in escrow by JLC Advisors.
On the same day, Singapore Exchange Regulation ordered Allied Tech to "expeditiously procure the release" of the funds held with JLC Advisors and place them in an account operated by an escrow agent with a licensed financial institution.
SGX RegCo said this was to safeguard Allied Tech's funds.
It is understood that the $33.4 million went missing before Allied Tech could transfer the funds to a new escrow account with a bank.
Allied Tech shares last traded at 1.1 cents on May 2, before it requested a trading halt on May 3.
It recommended on May 8 that the trading halt be converted into a voluntary trading suspension with immediate effect.