PERAK-BASED lingerie manufacturer Caely Holdings Bhd is basically clueless on events leading to the directive by the Malaysian Anti-Corruption Commission (MACC) to freeze bank accounts belonging to its group of companies given it was only made aware of such outcome by CIMB Bank Bhd which is one of its bankers.
Caely said it was notified of the freeze order by CIMB Bank on April 13.
“The company does not have any knowledge as the freezing order was never served on the company,” Caely said in a reply to Bursa Malaysia’s query pertaining to the company’s announcement on April 18 that all operational bank accounts of its group of companies have been frozen.
As the consequence of the freeze, Caely said it was unable to make any payment to suppliers, salary, banks or any party, thus exposing the company to potential lawsuits and claims for breach of contracts following failure to fulfil its commitment.
“We have communicated with the banks to allow the company to use the monies and requested for reason for freezing the accounts. We have (also) requested to unfreeze the accounts but we have yet to receive any response from the banks. Also, enquiries with MACC is still in progress,” Caely pointed out.
“At this juncture, the company is seeking legal advice on the courses of actions that can be taken.”
Meanwhile, Caely’s executive director and CEO Lim Chee Pang reassured all stakeholders that measures are being explored to ensure business continuity and sustainability.
“The unfreezing or partial unfreezing of the bank accounts are our top priority. We are exploring all avenues to resolve this issue as we need to ensure that business operations can sustain,” he noted in a media statement.
“We are answerable to our shareholders for how the business is run. The board of directors is monitoring the situation closely, too and is working with the management on unfreezing of the bank accounts.
“We are working on the next steps which also include measures to ensure that daily operations are not disrupted. The livelihoods of Caely employees as well as our suppliers and vendors are at stake.”
For now, it cannot be ascertained if the freeze of Caely’s bank accounts has anything to do with its recent appointment of Virdos Lima Consultancy (M) Sdn Bhd as forensic auditor to conduct an independent forensic audit on allegations of suspicious and irregular transactions within the company.
This came about after one of its independent non-executive directors received an anonymous package containing documents that raised concerns about several suspicious transactions involving the wholly-owned unit, Caely (M) Sdn Bhd (CMSB). The investigation is expected to be completed by May 31.
Earlier, Caely’s external auditor PKF Malaysia had issued a qualified opinion on the group’s audited financial statements for its financial year ended March 31, 2020 in relation to CMSB’s ability to recover certain receivables.
The auditor noted that CMSB had trade receivables of close to RM12 mil as of March 31, 2020 related to construction works for Felcra Bhd which were completed on Feb 28, 2018.
However, only RM250,000 in repayment had been received by the company since completing the works which it attributed to the change of government and the COVID19 pandemic.
As all payments for the construction have been delayed, PKF is of the view that with the prolonged delay, the carrying amount of trade receivables might be impaired due to uncertainty over the recoverable amount.
“We are uncertain of the full recovery of certain trade receivables of the group amounting to RM12 mil as at financial year end as a substantial amount on the completed constructions payments have not been received,” justified the external auditor.
PKF added: “We were unable to obtain sufficient and appropriate audit evidence on the impairment assessment of the above-mentioned carrying amount of the said receivables in accordance with MFRS 9 Financial Instruments. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.”
At the close of yesterday’s (April 20) trading, Caely was down 2 sen or 4.65% to 41 sen with 2.88 million shares traded, thus valuing the company at RM106 mil. – April 21, 2022
