Metronic Global: No financial impact from recent special audit

PETALING JAYA: Metronic Global Bhd announced that the findings of a recently-completed special audit report will have no financial or operational impact on its business.
In a filing with Bursa Malaysia today, the intelligent building management systems specialist said these irregularities took place in the past and appropriate provisions of the same were sufficiently made in the previous audited accounts.
“In the event of any recovery pertaining to the aforementioned matters, the group’s earnings would be adjusted accordingly during that period of recovery,” it added.
Metronic said the findings reported seven irregularities, including loan worth RM4.86 million taken by former director (allegedly taken to fully subscribe to the group’s entitlement to MNC Wireless Bhd’s right issue); unsold fertilizer stocks valued RM1.5 million was sold back to the supplier at a 50-60% discount; an equal share purchase of US$150,000 (RM628,000) in Gaharu fossil business with a third party without appropriate internal approvals: payments for units sold to a former director and parties related in Kuala Krai project paid directly to contractor instead of the group; an initial deposit of RM6.4 million paid for land in Cheras cannot be substantiated with a sale and purchase agreement; antiques and paintings worth RM511,898 purchased without appropriate internal approvals; and purchases of 3,400 units of healthcare foot massage machines despite stock being relatively slow.
Metronic said the group intends to take some measures to safeguard its assets and interests, including seeking legal advice in relation to the material findings, lodge police reports and other relevant authorities, and review the current internal control process to ensure that similar transactions will not recur.
Recall that following the engagement with Bursa Malaysia, the group had on May 2 appointed Ferrier Hodgson as its special auditor to conduct a thorough review of its projects and transactions to identify any irregularity in the company’s transactions.
On July 11, Metronic announced that it has terminated its CFO Eric Boon Chuan Kit for “his deemed obstruction and compromising the independency” of the special audit.
Metronic gained 9.09% to close at six sen today with a total of 172,000 shares traded. It has a market capitalisation of RM52.2 million.