PKF retracts China Automobile Parts' audit report for FY15

PETALING JAYA: China Automobile Parts Holdings Ltd’s (CAP) auditor PKF has retracted its report for the company’s financial statements ended Dec 31, 2015 (FY15) as it does not give a true and fair view of its financial position.
PKF explained that seven cases in litigation involving China Auto Parts’ subsidiary QuanZhou FenSun Automobile Parts Co Ltd were not disclosed by CAP directors during the audit, which could have a material adverse effect on the financial position. There were also significant unreported borrowings and material litigation for FenSun for the financial year under review.
PKF said that in spite of its advice, CAP did not take appropriate and effective action to address the matter.
PKF stressed that if CAP did not reply by the deadline (5pm last Friday), it would take appropriate steps and legal actions in accordance with the International Standards of Auditing 560 Subsequent Events and Section 320 of the Capital Markets and Services Act 2007.
Separately, China Automotive Parts announced that it is unable to release its first quarterly report ended March 31, 2017 by May 31, 2017 to Bursa Malaysia due to inability to finalise it within the time frame. It added that it is unable to determine the expected timeline for the issuance of the report at this juncture.
Trading in CAP shares will be suspended from June 8, being five market days after the report submission deadline.