KUALA LUMPUR: Property and power company Mudajaya Group Bhd
has filed a writ of summons and statement of claim in the Shah Alam High Court against a former employee of its unit Mudajaya Corporation Bhd.
It told Bursa Malaysia on Wednesday the suit against the ex-staff was for breach of fiduciary duty and/or breach of trust.
“The management of Mudajaya was of the opinion that should Mudajaya Corporation succeeds in the suit, it will have a positive impact to the financial position of Mudajaya Group in the current financial year ending Dec 31, 2018,” it said.
To recap, in March 2015, Mudajaya reported its internal management working group had found “some irregular transactions” that increased the costs of a project.
On instructions of the board, the working group conducted a comprehensive review of additional costs incurred on a specific project undertaken by the group which was included in its fourth quarter (Q4) 2014 report announced on Feb 27.
For Q4 ended Dec 31, 2014, Mudajaya announced a net loss of RM99.71mil on turnover of RM188.74mil, compared to a net profit of RM22.9mil a year ago.
Mudajaya on March 20 of 2015, it announced that an internal management working group had revealed an isolated case of irregular transactions in one project involving a former employee and had engaged forensic accountants KPMG to conduct a follow-through investigation.
Later in June that year, KPMG’s forensic audit of Mudajaya Group found evidence of breaches of duties and obligations and inappropriate conduct.
KPMG had found “evidence to suggest, on a prima facie (first glance) basis, that there have been breaches of duties and obligations and inappropriate conduct.”
“The findings of the investigation suggested that the irregular transactions were the conduct of a former employee and did not reveal any clear evidence of collaborated fraud,” said the construction firm and power plant operator.
“The board had earlier lodged reports with the relevant authorities and will assess initiating legal proceedings where appropriate. The board has been advised to keep confidential the details of the report and the nature of such proceedings so as not to adversely affect the investigation by the relevant authorities,” it said.
The KPMG report also confirmed that all financial impact to the group had been adequately accounted for and no additional provisions were required to be made.
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