Caely’s forensic auditor resigns as crucial information needed for audit goes missing

KUALA LUMPUR (June 13): Caely Holdings Bhd has announced that its auditor, Virdos Lima Consultancy (M) Sdn Bhd, cannot proceed with its forensic audit because critical information is not available.

In a filing from Bursa Malaysia, the Perak-based lingerie maker’s board of directors said its external auditor informed it that for various financial periods, key documents such as, but not limited to, invoices , payment vouchers, receipts and agreements, could not be located. Additionally, various company electronic devices that were assigned to prime suspects in their investigations had been removed and/or could not be located at Caely’s premises.

“These electronic devices may contain key electronic stored information such as, but not limited to, email communications, documents, spreadsheets, presentations, etc.,” the board said in the filing. .

This information, the auditor said, was vital for them to reach their investigative conclusions as they were looking for various complex and unusual accounting entries that were entered into the ledger of Caely’s wholly-owned subsidiary Caely (M) Sdn Bhd which would need to be traced, checked and verified against supporting documents.

Caely commissioned Virdos Lima in early April to conduct a forensic audit into allegations of suspicious and improper transactions at Caely. The appointment came after one of its independent non-executive directors received an anonymous package containing documents, raising concerns about several suspicious transactions involving Caely, as circumstances which led to the forensic investigation.

On April 20, the lingerie maker announced that the Malaysian Anti-Corruption Commission (MACC) had issued a freezing order on all operational bank accounts of the company and its subsidiaries. Two of its board members, namely executive director and chief executive Lim Chee Pang and independent non-executive director Lim Say Leong, subsequently resigned on April 29.

On May 18, three shareholders of the struggling lingerie maker who collectively owned at least 10% of the company called an extraordinary general meeting (EGM) to discuss various issues, including the removal of its new executive chairman Wong Siaw Puie and six other existing directors.

The EGM is scheduled for Wednesday, June 15.

On June 2, the group reappointed Wong as group executive vice president. It was his second redesignation in two months. She was reappointed executive chairwoman on May 17 while serving as executive director. She joined Caely’s board of directors as executive director on April 28.

The group clarified on June 3 that the order to freeze its bank accounts was still in effect, two months after MACC suspended its accounts.

For the fourth financial quarter ended 31 March 2022 (4QFY22), its net loss decreased from RM23.46 million to RM9.29 million due to an improvement in property development costs due to a provision lower for impairment amounting to RM7.2 million.

Quarterly revenue fell 17% from RM12.85 million to RM10.66 million, partly due to the cancellation of the sale, resulting in a revenue reduction of 4 RM.2 million.

Caely’s shares ended unchanged at 38 sen on Monday, giving it a market capitalization of RM98.13 million.

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