KUALA LUMPUR: An independent review by Deloitte Singapore has cleared software solutions provider Silverlake Axis Ltd and its founder Goh Peng Ooi of allegations of dubious business deals.
The Singapore-listed company had engaged Deloitte’s services following damaging allegations made in an anonymous online report titled “The Unbelievable Financial Alchemy of Silverlake Axis” on Aug 20, last year.
The executive report by Deloitte has been posted on Silverlake’s website.
“The board is of the view that the executive report clearly bears out that there was no impropriety in connection with the transactions reviewed and that these were undertaken in due compliance with applicable statutory and listing requirements and were beneficial to the company,” the firm said in a statement accompanying the report.
Last year, a 42-page anonymous report authored by a “razor99” had alleged foul play in certain interested-party transactions entered into between Silverlake and private companies controlled by Goh, and three acquisitions made by the group.
By mid-day the next day, the damage had been done, with the allegations reportedly causing the company’s share price to fall as much as 27% in intraday trade on Aug 21 and prompting the stock exchange to query the company over the unusual share-price movement.
Silverlake then asked for a halt in the trading of its shares.
Goh, who is the founder of the group, saw his wealth reduced by 43% or RM2.75bil between July 15 and Aug 26 last year after his shares tanked.
As of Aug 26, Goh’s net worth was about RM2.44bil based on his 66.4% stake in Silverlake.
The executive report by Deloitte explored the firm’s interested person transactions between July 1, 2012 and June 30, 2015 and tested samples of their transactions.
It conducted background searches and reviewed financial statements of Silverlake Private Entities (SPEs) or private companies controlled by Goh, which were customers or suppliers to the group.
It also performed data analysis to highlight any trends, patterns of behaviour or irregularities in the three interested person transactions – one in 2006 and two others in 2010.
“In all three acquisitions, Silverlake Axis Ltd has complied with all of the requirements of the SGX listing rules,” stated the report.
However, it made several observations and recommendations as to how to the group could enhance clarity and transparency in interested party transactions.
It said Silverlake and the private companies involved had “a number of common third-party customers” and during the review period, there had been several situations where the companies signed a contract with the end customer and then procured products and services from Silverlake, giving rise to an interested person transaction.
“Given the significance of the values of these contracts, there should be better clarity and transparency in the determination process of whether the Silverlake Group or the SPEs would be the contracting party with the end user customer,” it said in the report.