Earlier Welli Multi was in the limelight over SC’s query over the authencity of its trade receivable of Rm113m, recently, the company’s former managing director Ang Sun Beng and former executive director Ang Soon An were charged by the Securities Commission (SC) with four counts of providing misleading financial statements to both the SC and Bursa Malaysia Securities Bhd.

Details:

• Both brothers were released on bail of RM150,000 each with the stipulation that both surrender their international passports to the court. If convicted, each faces a fine of up to RM3 million or a maximum jail term of 10 years, or both.
  The alleged offences were committed in contravention of Section 122B(a)(bb), read together with section 122(1) of the Securities Industry Act 1983 (SIA). The alleged misleading statements relate to Welli Multi’s revenue figures in the audited statements for the year ending Dec 31, 2005 and its quarterly reports for the financial periods ended March 21, June 30 and Sept 30, 2006
• The SC also compounded Welli Multi’s former executive director and chief executive officer Tan Chin Han for RM100,000 for knowingly authorising the furnishing of a misleading statement to Bursa Malaysia on Feb 28 last year. The misleading statements were in relation to Welli Multi’s revenue figures for the three months ended Sept 30, 2006 and are in breach of Section 122B of SIA.
• Since November last year, the SC has been coming down on Welli Multi to rectify and reissue the aforesaid financial statements. The company, which is in the business of processing palm kernel, was also on the SC’s radar due to suspicious receivables.
• Although Welli Multi saw the injection of new blood at the beginning of April, the company has yet to supply Bursa Malaysia with its outstanding financials.
  These comprise quarterly reports for the quarters ended June 30, 2007, Sept 30, 2007 and Dec 31, 2007; audited financial statements for the period ended March 31,2007 and the annual report for the year ended March 31, 2007

Liqua Health Corporation Bhd, a main board-listed company which is primarily involved in the selling of health food products like spirulina using the multi level marketing model/concept has informed Securities Commission that it had appointed chartered accounting firm Baker Tilly Monteiro Heong to conduct an investigative audit of certain transactions disclosed in the company’s fourth-quarter results for the period ended Dec 31, 2007.

Some details:

•  The special audit is to look at a transaction amounting to RM15 million paid by Liqua’s wholly owned subsidiary Liqua Health Marketing (M) Sdn Bhd to an exclusive supplier of health care products. According to the notes to the accounts for the unaudited results for the financial year ended Dec 31, 2007, Liqua stated that the money was paid to the supplier of nine core products who is supposed to deliver the products to its wholly-owned subsidiary, Liqua Health Marketing (M) Sdn Bhd.. However, the scheduled products were not received leading to the cancellation of the orders and Liqua sought repayment of the amount paid. A written confirmation and commitment to repay was given by the supplier. Notwithstanding this commitment from the supplier and pending finalisation of the proposed settlement, Liqua has made a provision for RM8 million in doubtful debts. It is believed that the probe could be to ascertain if Liqua would be required to make additional provisions and who the supplier is.
• Liqua, which posted over RM11 million in net losses on the back of RM41 million revenue for the financial year ended Dec 31, 2007, has seen significant changes to the board last month. It appointed Low Donald Han as chairman in mid-March and also redesignated executive directors Rohaya Hashim and Yeoh Eng Kong to non-executive positions.
• The health food marketing firm had chalked up some RM92.37 million in net losses for the financial year ended Dec 31, 2005 on the back of RM37.76 million revenue. The company booked RM78.46 million of “impairment of goodwill” for the year as stated in its 4Q05 results filing to Bursa.
• Net losses shrank to Rm3.39m during the 2006 financial year, but more than tripled to Rm11.08m during the 2007 financial year, despite an improvement in revenue to Rm41.36m. At the end of FY07, Rm108.67m in accumulated losses.

In the Chairman’s report of MP Technology Resources Bhd dated 4th May 2007 for the year ended Nov 30 2006, its executive chairman Mat Hassan Esa highlighted that there are previous mismanagements which resulted in a much greater group loss.

Group losses for the year were RM142.99mil, up from losses of RM30.3mil in the previous year. The board subsequently decided to make necessary adjustments which included large provision for accounts receivables and write off of investment account which are non-existent to the accounts. This therefore resulted in a deficit in its adjusted shareholders’ equity on a consolidated basis amounting to RM58.92million. The company is categorised as an affected listed issuer pursuant to Practice Note No 17/2005 (PN17) of the listing requirements of Bursa Securities.

Mat Hassan also stated the board had taken steps to regularise the operations of the group by appointing professional advisers for a restructuring exercise. He had lodged several police reports on the financial irregularities.

The Minority Shareholder Watchdog Group (MSWG) CEO Abdul Wahab Jaafar Sidek has called on MP Technology Resources Bhd (MPTech) shareholders to voice their concerns over the company’s alleged mismanagement, ability to be on a going concern(auditors report ) and company yet to finalize or submit a plan to resolve the company’s PN17 status at its AGM tomorrow.