TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issu...
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Regulator wants ACs and directors to be able to remove, appoint legal reps
By LYNETTE KHOO
24 March 2011
Amid rising concerns over recent accounting issues at S-chips, Singapore Exchange (SGX) has sent out reminders to audit committees (ACs) this week to implement proper controls to safeguard cash and other assets.
SGX has also asked the ACs and directors of listed companies to ensure that Articles of Association of key Chinese subsidiaries allow them to appoint or remove legal representatives.
BT understands that these email messages have been sent out to the ACs of SGX-listed Chinese companies this week.
Their ACs are to inform the Exchange of the outcome of their internal reviews by May 31. They have to also confirm that they have incorporated the provision on legal representative or otherwise explain why they have not.
SGX encouraged the boards of directors to consider engaging qualified audit and legal professionals to determine if certain controls on cash and seals need to be strengthened.
‘Post-implementation, companies should engage these professionals to review that these controls are working effectively,’ SGX added. ‘Additional procedures such as cash validation could be performed by auditors on an ongoing and regular basis.’
SGX released a regulatory note yesterday confirming that it has written to some companies, reminding directors of their role in ‘maintaining a strong control culture and conducting stringent checks to safeguard assets’.
Several S-chip companies also told BT that they have received the email reminders from SGX.
Steven Ho, an AC member at zipper maker Fuxing China, said the group’s AC will soon be holding meetings to discuss the action plan.
Fuxing chief financial officer Koh Choon Kong told BT that the provisions to appoint and remove legal representative at its Chinese subsidiaries are already in place.
The problem with legal representatives, who wield significant power because they hold the company seal, has become quite pronounced in some S-chips.
Falmac Ltd, for instance, was denied access to essential accounting records by an uncooperative legal representative who refused to step down, while Singapore firm Tat Hong has begun civil proceedings in China to remove the legal representative of a joint-venture firm who allegedly mishandled the unit’s funds.
While removing an uncooperative legal representative will be challenging, what SGX is trying to do is to at least ‘get the legal infrastructure and mechanisms in place’, said Robson Lee, a partner at Shooklin & Bok and an AC member of Youcan Foods.
He told BT that Youcan’s AC is engaging a PRC lawyer to review the Articles of Association and is likely to undertake a separate engagement with its external auditors for the internal review.
Since 2009, SGX has called on listed companies, their board of directors and market professionals to heighten vigilance on key risk areas such as cash control and impairment of accounts receivables.
SGX noted that listed companies and auditors have been responsive and have extended their audit procedures to good effect.
‘While the economic and liquidity conditions have improved since 2009, directors and auditors should not relax their vigilance,’ it said yesterday.