SINGAPORE (THE BUSINESS TIMES) - The board of directors of Catalist-listed Incredible Holdings on Thursday (July 21) responded to criticism from the Securities Investors Association (Singapore), or Sias.

In a bourse filing, the company said it wished to address certain "insinuations" made against it by Sias in a commentary written by Sias chief executive David Gerald.

In the article, Mr Gerald noted that Sias had sent a letter with questions to Incredible Holdings before its last annual general meeting to raise concerns about the independent directors' oversight of management, the safeguarding of shareholders' interests, and the role of the sponsor. Mr Gerald said the company chose not to respond to these concerns.

In its clarification filing, Incredible Holdings claimed it replied to all inquiries from Sias on the evening of June 23 via an e-mail to Mr Gerald. The company said "multiple parties" were included in the e-mail response and could "bear witness" to the reply.

The company also noted that Mr Eric Lim, head of corporate governance and investor rights at Sias, had replied to the said e-mail on June 27, thanking the company for answering the questions from Sias.

"This shows your board and management's willingness to be accountable and practise good corporate governance," Mr Lim had reportedly also said.

In his article, Mr Gerald also flagged that Incredible Holdings had paid $1.1 million for HB 2021 - a company with a shop in Denmark - but that the fair value of net identifiable assets of HB 2021 stood only at $8,600.

To this, Incredible Holdings said the consideration of $1.1 million was arrived at based not only on the registered capital of $8,600, but also "good quality furnishings and fittings armed with bulletproof display cabinets and drawers as well as (an) advanced security system".

Incredible Holdings argued that based on its internal cost estimates and assessment, it would have to fork out "a few million" Danish kroner to set up a store with the same security standard and quality.

Mr Gerald also noted in the article that Incredible Holdings' annual report had contained a qualified opinion from its auditors.

Incredible Holdings' response was that although the external auditors were unable to obtain sufficient appropriate audit evidence on the business rationale for the group's acquisition of HB 2021, the company had provided all supporting documents to the auditors during the audit and upon request.

The company added that its audit committee, having reviewed both the management's and the external auditor's views on the acquisition, concurred with management on the responses and explanations relating to the business rationale, the consideration paid for the acquisition, and the subsequent impairment.