Preliminary audit of Scanwolf finds possible irregularities

KUALA LUMPUR: PKF Covenant Sdn Bhd, which Scanwolf Corp Bhd appointed on April 23 to conduct an investigative audit of the group, has highlighted in its preliminary findings “possible irregularities” in the company and some of its subsidiaries in the property development division.

Among others, the preliminary report said there appeared to have been no record of deliberation by the board before the joint development agreement with Almal Development (M) Sdn Bhd (ADSB) that was executed on May 26, 2011 and no formal valuation of the land concerned.

It also said there seemed to have been a breach of the Main Market Listing Requirements as Scanwolf did not make an immediate announcement of the incorporation and/or acquisition of Scanwolf Development Sdn Bhd (SDSB) as a subsidiary company of the group.

The report added that there might have been a possible conflict of interest arising from an undisclosed relationship between a former director of the company and ADSB, which was in existence at the relevant times when the a joint development agreement was entered into.

It also said there appeared to have been cash payments made by SDSB to open fixed deposit accounts under a former director of the company in order to procure bank guarantee facilities, which were instead supposed to have been paid by the said director.

PKF Covenant also highlighted that there appeared to have been sales commissions paid to Gegaran Lagenda Sdn Bhd by SDSB, without the disclosure of the involvement of certain former directors of the company, as well as certain shareholders of ADSB and the possible conflicts of interest arising.

Pursuant to these revelations, Scanwolf, which is involved in the design and manufacture of plastic extrusions and property development, will seek its legal advisors’ advice on its next course of action.