The Singapore Exchange S68 Securities Trading Limited (SGX-ST) Listings Disciplinary Committee (LDC) has issued a public reprimand to Y Ventures Group 1F1 .
The group was said to have breached SGX’s Catalist rule 703(4)(a) by releasing its unaudited financial statements for the 1HFY2018 ended June 30, 2018. The results were said to have been inaccurate and non-factual with material errors and, or omissions.
The group also breached Catalist rule 703(1)(a) by failing to disclose that its half-year results were “false and misleading”. This fact, which was said to be known to the company, was important in order to avoid establishing a “false market” in the company’s securities.
Finally, the group breached Catalist rule 719(1) by “failing to have a robust and effective system of internal controls, addressing financial, operational and compliance risks”.
Y Ventures Group, on Aug 14, 2018, reported that the group made a profit of US$143,330 for the 1HFY2018. The group added that it expects to remain profitable for the FY2018 “barring any unforeseen circumstances”.
The board, in its statement for the 1HFY2018, confirmed that nothing was “false or misleading in any material aspect”.
On Nov 9, 2018, the group’s new chief financial officer (CFO), Joshua Huang Thien En, submitted the second draft of the group’s consolidation worksheet for the 9MFY2018, which reflected a revised loss of some US$1.73 million.
Huang then informed the group’s CEO on Nov 15, 2018, about the possible errors in the group’s original results for the 1HFY2018 based on the third draft of the consolidation worksheet for the 9MFY2018 ended Sept 30. The draft showed a revised loss of approximately US$2.08 million.
Around mid-November 2018, each of the members of the Board was made aware of the possible errors in the original 1HFY2018 results announcement.
See also: How 'shareholder value' became a Wall Street mantra
After a series of discussions and meetings, a final draft of the restated 1HFY2018 numbers reflecting a loss of US$1.16 million was released on Jan 21, 2019. A profit warning was included in the revised report with the company now expecting to report a net loss for the FY2018.
Following the announcement, shares in Y Ventures fell progressively from 20 cents as at the close of Jan 21, 2019, to 12 cents on Jan 25, 2019, and further to 8 cents on Jan 30, 2019.
With this, the LDC has also issued a public reprimand to Y Ventures’ former CFO Chin Ngai Sung for causing the company to breach Catalist rule 703(4)(a). In doing so, he was deemed to have breached Catalist rules 302(5) and 302(6).
As such, the LDC has asked Chin to provide the exchange with a signed written undertaking promising that he will not seek any directorship on the board of directors, or role as a key executive officer of listed issuers. He will not be allowed to do so for two years starting from Sept 22.
The board of directors who were involved at that time were also issued a public reprimand.
Low Yik Jin, the CEO and executive director of Y Ventures; Low Yik Sen, the then-managing director; Edward Tiong Yung Suh, the group’s lead independent director; Wong Sok Mei, a former independent director; Ng Tiong Gee, independent director; and Twoon Wai Mun Benjamin, a former non-executive director breached Catalist rule 302(6) for causing the company to breach rules 703(1)(1) and 719(1).
Shares in Y Ventures closed at 2.2 cents on Oct 20.
