Asiasons hires auditor to study licence lapse
Asiasons WFG Financial has hired a Big Four independent auditor to investigate the lapse of its broking arm’s licence, and a report is expected around the end of January, chief executive Quah Su-Yin told BT.
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Big Four firm to report findings on breaches at broking arm
By KENNETH LIM
31 January 2012
Asiasons WFG Financial has hired a Big Four independent auditor to investigate the lapse of its broking arm’s licence, and a report is expected around the end of January, chief executive Quah Su-Yin told BT.
‘We have engaged an independent, third-party auditor to conduct an investigation,’ she said. ‘They are supposed to issue a report by month-end, although I have yet to receive it.’
Asiasons had said previously that it was conducting an internal inquiry, but did not say if it involved an independent audit.
The corporate finance and investment firm said on Dec 23 that its wholly owned unit, Asiasons WFG Securities Pte Ltd, had stopped all business because it could not meet certain financial ratio requirements under its Capital Markets Services (CMS) licence.
The group warned that it might face sanctions from the Monetary Authority of Singapore (MAS).
Asiasons will share the findings of the auditors with the MAS, Ms Quah said.
MAS guidelines on criteria for CMS licences state that boutique corporate finance advisory firms must have a base capital of at least $5 million, comply with financial and margin requirements, and maintain professional indemnity insurance.
Non-executive deputy chairman Ng Teck Wah has previously said that the lapse was due to internal controls, and that ‘technical breaches were not picked up’. He added that the company would want to understand how the lapses occurred before tackling the question of whether to reapply for the licence.
Ms Quah echoed those sentiments but declined to comment on whether Asiasons would be interested in getting the licence back.
The impact of the lapse was not expected to affect Asiasons’ earnings materially, because the broking business was loss-making.
The group had also been cutting back on its stockbroking business, whose most recent function was mostly syndicating equity deals. Its research arm was mostly supporting the broking business. Asiasons’ private equity, exempt fund management, pre-IPO consultancy and corporate finance advisory business are not subject to sanctions and are functioning as normal.
Asiasons common stock has been rising since the news of the lapsed licence. It jumped up by 25.5 per cent or 2.8 cents on Monday to close at 13.8 cents in light trading.
The group last reported a net loss of $1.45 million in the six months ended June 30, 2011 and net assets of $32.5 million at the end of that reporting period.