SINGAPORE - Luxury car distributor EuroSports Global said on Thursday night (Aug 5) that its executive chairman and chief executive Melvin Goh Kim San is being investigated by the Commercial Affairs Department (CAD).
He was at the CAD office on Wednesday, Aug 4, for investigation under the Securities and Futures Act.
"CAD has retained Mr Goh's mobile phone as part of the investigation. Mr Goh has voluntarily surrendered his passport to the CAD," said the company in a Singapore Exchange filing.
EuroSports, meanwhile, has been served with an order by the CAD and Monetary Authority of Singapore to produce certain documents needed for the purpose of their investigation. "The company will cooperate with the authorities in this regard," it said.
The Straits Times understands the probe revolves around a deal EuroSports had with a Hong Kong firm four years ago.
EuroSports, which was listed in 2014, entered into a memorandum of understanding (MOU) to acquire shares in SS Ventures, a company incorporated in Hong Kong.
SS Ventures is a software solutions company owned by businessman Siu Tat Man. It focuses on the transportation industry and is behind a taxi-hailing app called Flytaxi.
EuroSports said in an announcement at the time that the acquisition would provide synergy to its motor-related activities here. Its share price rallied following the announced planned acquisition, rising from a low of 14 cents in January 2017 to as high as 26 cents in June 2017.
But the proposed acquisition did not materialise when the MOU lapsed after August 2017.
With investigations ongoing, Mr Goh, 65, has "voluntarily agreed" to a suspension of his duties as the executive chairman, CEO and director of EuroSports, the company said in Thursday's filing.
His younger brother, deputy CEO Andy Goh Kim Hup, will take over as interim executive chairman and CEO until further notice.
"Mr Goh will not exercise any executive powers but will remain at the disposal of the board of directors and the group to render advice on all ongoing projects," EuroSports added.
"The board assures that the business and operations of the group will not be affected and will continue as usual," it said.
EuroSports is known for the Lamborghini, Alfa Romeo and Touring Superleggera brands it distributes here.
In 1998, Mr Melvin Goh formed Eurosports Auto to import vehicles and clinched the Lotus dealership. Three years later, the firm clinched an exclusive deal with Lamborghini.
He grew up in and around his father's car workshop, learning how to take vehicles apart. His late father, Mr Goh Lue Tee, owned Gay Hin Enterprise in Upper Paya Lebar which sold used Datsuns (now Nissan) and Toyotas.
EuroSports reported net losses of $3.9 million for the financial year 2018, but narrowed its losses to $178,000 in FY2019. For FY2020, the group posted a $2.3 million profit.
Shares of the Catalist-listed company tumbled on Friday, after the CAD probe announcement. After falling as much as 18 per cent, the stock closed down 12 per cent or three cents at 22 cents.
Before Friday, EuroSports shares were up about 50 per cent for the year.
