Scorpio East Holdings

[lonewolf]

Scorpio East has announced the appointment of Special Auditors to 'ascertain the veracity of the Group’s transactions and balances with certain contracting parties which have been entered into or terminated by the Group recently, and bank transactions.'
[Source]

Has the accounting irregularities contagion spread to local companies. It would be interesting to see how the media and public makes of this.

[Musicwhiz]

Has the accounting irregularities contagion spread to local companies. It would be interesting to see how the media and public makes of this.

I was quite shocked to read the announcement as well. Scorpio East is known for distributing some films, and I think it also distributes and promotes local films (?).

I've noted that when a stock is not heavily punted, traded or speculated on (like Scorpio), no one seems to give a damn if it has accounting irregularities or integrity issues. Just look around some of the more popular forums and everyone is constantly still talking about Gaoxian......

[Musicwhiz]

Mar 26, 2011
Scorpio East seeks trading suspension
Local firm has appointed special auditors to sort out irregularities in its books
By Yasmine Yahya

YET another Singapore-listed firm has requested a trading suspension as it seeks to sort out irregularities in its books.

This time, it is local firm Scorpio East, a distributor of entertainment programmes and organiser of live concerts in Singapore and Malaysia.

The company announced in a statement to the Singapore Exchange (SGX) that it has appointed Stone Forest Corporate Advisory as special auditors.

Stone Forest will be examining the veracity of recent transactions with certain parties that the company had entered into or terminated recently as well as related bank transactions.

The special auditors will also review the circumstances leading to the creation and termination of these contracts.

However, a check on the SGX website showed that Scorpio East had announced few contracts over the last year.

In September, the firm announced it had entered into an agreement with RBC Dexia Trust Services Singapore over the proposed sale and leaseback of the Scorpio East Building at 25 Tai Seng Avenue. RBC Dexia was acting on behalf of Cambridge Industrial Trust, which was purchasing the building.

A month later, in October, Scorpio East announced it had used $300,000 from the proceeds of a share placement to pay for part of the construction costs of the same building. The placement had raised about $1.4 million.

Scorpio East did not publish any more announcements relating to business transactions until last week, when it said chief executive and executive director Ho Ah Huat had disposed of his entire 18.93 per cent stake in the firm.

Two other shareholders had done the same, the firm announced, selling off their entire combined stake of 8.79 per cent in Scorpio East. One of them was executive director Lian Lee Lee.

A third shareholder pared down his stake from 2.68 per cent to 0.83 per cent.

The statement added that after the disposals, Mr Ho would cease to hold the posts that he had at the firm, while Ms Lian would be redesignated as a non-executive director.

The firm also said its board of directors had no disagreement with Mr Ho or Ms Lian, and that there were 'no matters relating to their cessation or redesignation that need to be brought to the attention of the shareholders of the company'.

Mr Ho and the three shareholders had sold their shares to Telemedia Pacific Group, a Hong Kong-based firm that provides infrastructure for communications and is now the controlling shareholder of Scorpio East.

Telemedia Pacific's founder and chief executive is Mr Hady Hartanto, who has been appointed executive director of Scorpio East.

Besides appointing special auditors, Scorpio East said it has put in place several interim measures to safeguard the assets of the firm.

All cash disbursements exceeding $10,000 will require the prior approval of the audit committee, as will all new contracts that the company wants to enter into.

Scorpio East had requested a trading halt on Tuesday, and yesterday requested that the halt be converted into a suspension.

When contacted by The Straits Times, the firm declined further comment.

Scorpio East is the latest in a string of companies to have been suspended from trading over financial irregularities, including China Gaoxian, China Hongxing Sports and Hongwei Technologies.

yasminey@sph.com.sg