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 issue manager
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A forensic review of energy equipment maker Trony’s accounts uncovers three sets of books with different figures and many unanswered questions
Eric Ng
12 January 2015
Several sets of books with varying figures, missing computers, erased data, dubious clients and suppliers - the irregularities at Trony Solar Holdings [1], whose shares were suspended from trading in June 2012 - are the stuff of a regulator’s nightmare.
Having spent a year on field investigative work and 15 months to compile its findings, PricewaterhouseCoopers found three sets of accounting books with significantly different figures, the solar equipment maker said in a recent stock exchange filing on the findings of the forensic accounting review looking into possible discrepancies in its financial records.
But PwC was unable to conclude which set contained the real figures as the supporting documents for transactions had gone missing, electronic data had been deleted and top managers claimed they did not know anything.
Still, Trony said PwC’s findings suggested that Sung Goji, an assistant to independent non-executive director Che Shujian, was a director of a company buying its products as well as owner of a supplier that allegedly provided fictitious information about its dealings with Trony.
The allegations were contained in anonymous e-mails and a letter sent in March and April 2012 to Trony’s auditor Deloitte Touche Tohmatsu. They also alleged that Trony’s financial statements published before and after its initial public offering in October 2010 were doctored, as were the tax payment records provided to Deloitte.
Trony’s board later found “possible discrepancies” in its books and decided in June 2012 to halt its shares from trading and conduct a forensic review of its books.
Two e-mails found by PwC in Trony’s computers suggest Sung was Che’s assistant at least from January 2011 to February 2012.
Che was an independent non-executive director, in a role designed to monitor Trony’s corporate governance, between September 2010 and February 2013.
Che is a former chairman of Hong Kong-listed red-chip travel agency and hotel operator China Travel International Investment HK. He has also been in the past a delegate of the central government’s advisory body, Chinese People’s Political Consultative Conference, a “specially appointed” investigator of the State Council, and a director of the Administrative Affairs Office of the Ministry of Construction & Development.
A spokesman for China Travel said the firm no longer had his contact details since he retired many years ago.
Trony’s spokesman said the company had provided PwC Che’s telephone number but PwC was unsuccessful in contacting him. The spokesman declined to give Che’s contact details to the South China Morning Post.
After PwC started its field investigation work, an anonymous caller and some unidentified former Trony employees contacted PwC with more allegations, such as funds being transferred from subsidiary True Solar USA to a number of investment vehicles in the United States owned by Fei Lanlan, a woman friend of chairman and chief executive Li Yi.
True Solar and HLM Investment, one of the vehicles owned by Fei, share the same address, based on information found on the internet, according to PwC, which quoted Li as saying he “borrowed” the address from Fei as he did not have a social security number to register an address in the US.
Trony said PwC identified “major amounts” were transferred from Trony to True Solar but could not confirm if funds had been subsequently moved to Fei’s vehicles as alleged because of “the lack of any description” in True Solar’s bank accounts.
But Trony said PwC found two e-mails that showed Fei “may be connected” to a supplier alleged to provide fictitious information of its dealings with Trony.
Figures in the first set of books found by PwC were consistent with Trony’s accounts audited by its mainland auditors, while those in the second set of books resembled figures in the accounts audited by Deloitte, Trony said.
It added that the third set of books only contained sales, purchases and inventory figures. Sales in 2011 were close to those claimed in the allegations and much lower than the 198.5 million yuan (HK$247.6 million) in the first set of books and 1.66 billion yuan in the second set.
The sad truth is that whoever was behind the irregularities probably has won this game ... It’s the small investors who have lost out
Former Trony employee
Net profit for 2011 was 10.8 million yuan in the first set of books and 481.8 million yuan in the second.
Tax payment amounts shown in the first set, which are significantly lower than those in the second, were close to the amounts stated in the tax payment certificates obtained by Trony from the tax bureau’s website, Trony said.
Chief financial officer Liang Zhihao said he was aware of the first and second sets of books but did not know the reasons for the discrepancies, and that former financial controller Liang Liguang did not respond to his request for explanations, according to Trony. Liang Zhihao took over Trony’s financial matters in February 2012.
Howard Chu Ho-hwa, who was Trony’s chief financial officer between mid-2009 and October 2011, a year after its listing, declined to comment when asked if he knew about the multiple books.
Trony said Liang Zhihao told PwC he was unable to retrieve any tax information he previously provided to Deloitte since his computer had been changed after he resigned in April 2012, and he used a new one when he rejoined a few months later.
PwC was only able to access Li’s company desktop computer whose Windows operating system was reinstalled in February 2012. Li told PwC his company laptop, which he had taken to the US since October 2012, was stolen in a coffee shop in May 2013 but he did not report the theft because of his poor English.
Trony also said the company’s independent review committee that appointed PwC to do the forensic review “concludes that those limitations [faced by PwC in the review] are incapable of being resolved in their totality and thus it is unlikely that further investigation would arrive at any satisfactory findings”.
Trony’s spokesman said it had made initial contact with Deloitte to audit its books.
Asked whether the audit should have begun earlier, given the large amount of record-keeping deficiencies identified during the forensic review, he said Trony had approached Deloitte several times to ask if it could do the audits concurrently with the forensic review.
He also said Deloitte had told Trony the audit should be done after the forensic review was completed because the problems should first be identified by the review for the audit to focus on them.
Deloitte would not comment on the case, citing client confidentiality.
According to a late 2012 announcement by Trony, its shares can only resume trading after it has published all outstanding financial results and addressed any concerns raised by its auditors through qualifications in their audit report, demonstrated there are no significant deficiencies in its corporate governance and put in place adequate financial reporting procedures and internal control systems to meet the obligations of listing rules.
“The sad truth is that whoever was behind the irregularities probably has won this game because the fact that the case has been allowed to drag on for years means that money has probably been moved to safe havens and important evidence destroyed,” said a former Trony employee. “It’s the small investors who have lost out.”
JP Morgan, ICBC International and CLSA were the joint global co-ordinators of the share offering.
ICBCI Fund Management owned 10.3 per cent of Trony, according to stock exchange filings.