SINGAPORE – The police are investigating a case of suspected misappropriation and suspicious purchases at a subsidiary of Kim Heng, a Catalist-listed offshore and marine services provider.
The company flagged the case to the police on Dec 21 after discovering that certain transactions at the unit – Zale Offshore – might have been inflated or entered into with a conflict of interest, with certain fixed assets misappropriated.
The amount connected to the case is estimated at $160,000, which is about 1.8 per cent of the group’s audited net profit after tax for the financial year ended Dec 31, 2022, the company said in a bourse filing.
A majority of the aggregate amount pertains to that financial year, the company said.
The group incorporated Zale Offshore in August 2020 to undertake marine salvage and commercial diving activities.
Anomalies were first discovered in October while conducting an internal routine audit on its fixed assets.
Internal investigations later connected the sums to Zale Offshore’s general manager (GM). The man, who was appointed GM in September 2020, was sacked in November.
The company said the investigations found reasonable grounds to believe that he had deceived or sought to deceive the group. Such conduct constituted “gross misconduct”, the company said.
The management is also of the opinion that certain conflict-of-interest transactions entered into, as well as unaccounted fixed assets under his care, constituted gross misconduct.
With the case now handed over to the police, the company said it will offer full cooperation to the relevant authorities as and when needed to aid in their investigations.
The case is not expected to materially impact the audited consolidated financial statements of the group for the financial year ending Dec 31, 2023, the company said.
Shares of Kim Heng closed 2.4 per cent lower at $0.083 on Dec 21. THE BUSINESS TIMES