SGX RegCo orders Kitchen Culture to appoint special auditor
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Singapore Exchange Regulation (SGX RegCo) has directed kitchen supply retailer and distributor Kitchen Culture Holdings to appoint an independent special auditor amid recent developments that include unauthorised transactions and suspected payroll irregularities.
In a notice of compliance issued to Kitchen Culture on Thursday - the second one since July 14 - SGX RegCo said it is aware that the company's continuing sponsor, SAC Capital, has received information that suggests there could "potentially be concerns" over unauthorised transactions within the company.
Such transactions may not be in the company's ordinary course of business and may not be supported by proper agreements.
The regulator added that, as disclosed on July 31, Kitchen Culture had filed a police report with the Commercial Affairs Department in relation to suspected payroll irregularities of around $520,000.
It has directed the company to appoint a suitable independent auditor - as recommended by SAC and approved by SGX RegCo - to review circumstances surrounding the payroll matter as well as the unauthorised transactions, and assess if there were other unauthorised transactions in the past year.
The special auditor must also review the group's internal controls, processes and procedures in relation to due diligence performed on acquisitions and disposals in the past year; and review the group's whistle-blowing policies, processes and procedures and advise it on whether they are adequate and effective.
The special auditor must review all whistle-blowing reports received by Kitchen Culture and/or its directors; assess whether internal policies, processes and procedures have been adhered to; and assess whether issues brought up by the whistle-blower(s) have been robustly investigated by non-conflicted persons and addressed in the process.
Where internal control weaknesses are noted by Baker Tilly Consultancy (from its earlier findings in an interim report) and the special auditor, the special auditor must recommend enhancements to ensure adequacy and effectiveness of the internal controls.
Further, the special auditor must review earlier matters raised in SGX RegCo's notice of compliance issued on July 14.
The regulator had asked Kitchen Culture's audit and risk committee to commission an expansion of Baker Tilly's scope of work to include looking into the circumstances that led to breaches or potential breaches of regulation and identifying the parties responsible.
The special auditor reports only and directly to SGX RegCo and SAC.
The Catalist-listed Kitchen Culture called for a trading halt on July 7. Its shares last traded at eight cents.
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