Maxwell management to make trip to Malaysia

PETALING JAYA: Maxwell International Holdings Bhd’s management is planning to travel to Malaysia with the aim of resolving and providing more supporting documents on its controversial advertising expenditure.
In a stock exchange filing last Friday, Maxwell said that it is still liaising with Ferrier Hodgson MH Sdn Bhd (FHMH), which was appointed in December 2015 to do an extended scope of audit on an advertisement expenditure that was said to be the main cause for Maxwell’s third-quarter loss of RM46.253 million.
“The company’s management is making arrangements to come to Malaysia to resolve and provide more supporting documents to FHMH on the extended scope of audit on the advertisement expenditure, and is still liaising with FHMH on this matter,” it said in the announcement.
Maxwell made a significant net loss of RM46.253 million for the third quarter ended Sept 30, 2015 compared with the net profit reported for the preceding year’s corresponding quarter of RM12.18 million, mainly due to advertisement expenses incurred in the retail business.
On Feb 5, its statutory auditors Baker Tilly Monteiro Heng (BTMH) also highlighted additional issues relating to the annual audit for the year ended 2015 which required further clarification and recommended that an investigative audit be carried out on these issues.
BTMH had expressed concern on whether the RM103.7 million cash placed with an asset management company, Jinjiang Jin Chuang Private Capital Management Co Lt, was genuine and could be recovered.
On this point, Maxwell said Jinjiang Zhenxing Shoes & Plastics Co Ltd (Zhenxing Shoes) will arrange for Jin Chuang to transfer all the funds into the account of Maxwell’s wholly-owned subsidiary Zhenxing Shoes.
“As the concern raised by the statutory auditor is on the recoverability of the funds placed with Jin Chuang, the company decided that Zhenxing Shoes will notify the asset management company to transfer all the funds into Zhenxing Shoes’ bank account or a bank account nominated by Zhenxing Shoes,” said Maxwell.
Maxwell added that it has accepted the advice of its independent directors to seek legal counsel on the matter.