Kingsmen Creatives

[violinist]

dydx keeps mum.......

[CityFarmer]

Seriously I wonder why no one questioned the impact of the fraud to Kingsmen reputation? Remember Kingsmen is in an extremely competitive industry and if fraud is in the books can it still continue some of its business? For eg, will Singapore F1 still engage Kingsmen in Sept? Such large projects needs certainty during the critical period of the event.

Not vested.

I doubt there is impact on KC's business due to the recent fraud in KBJ and irregularity in KE. There are likely impact on the personal reputation of founder and management team, but not on the business IMO

It is only $2-3 million issue out of $260 million business, and involved with only 1 or 2 contractor(s). Unless more issues pop-up after CAD investigation, and shows that it is actually a norm, instead of an isolated events.

[Share Investor]

I have a feeling this incident will not have great impact on KC's business. But I will let the price stabalise first before assessing if it is attractive to buy more.

Vested.

[FFNow]

Seriously I wonder why no one questioned the impact of the fraud to Kingsmen reputation? Remember Kingsmen is in an extremely competitive industry and if fraud is in the books can it still continue some of its business? For eg, will Singapore F1 still engage Kingsmen in Sept? Such large projects needs certainty during the critical period of the event.

Not vested.

I doubt there is impact on KC's business due to the recent fraud in KBJ and irregularity in KE. There are likely impact on the personal reputation of founder and management team, but not on the business IMO

It is only $2-3 million issue out of $260 million business, and involved with only 1 or 2 contractor(s). Unless more issues pop-up after CAD investigation, and shows that it is actually a norm, instead of an isolated events.

Yes, I don't think this case will affect Kingsmen's business going forward. If I were a client of Kingsmen, I would not be too concerned about the financial irregularities but rather be more concerned about the quality of project done by Kingsmen and whether Kingsmen upholds what it promises.

To put things into perspective, there are worst cases out there (remember the SIA Teo Cheng Kiat case that went on for 13 years!). It's not really a fraud in KE's case. It was a case of the employees being too eager and looking good themselves. Remember that no money went into their own pockets as mentioned by Ben in the BT article.

[kazukirai]

Having read the various statements and reports in the papers, it seems to me that it is fraud committed AGAINST the company rather than BY the company. Big difference here when it comes to assessing the impact of whether clients will not want to continue awarding business to Kingsmen.

[CityFarmer]

Having read the various statements and reports in the papers, it seems to me that it is fraud committed AGAINST the company rather than BY the company. Big difference here when it comes to assessing the impact of whether clients will not want to continue awarding business to Kingsmen.

It depends on the definition of "the company"

If the company means management, then your assessment is right

If the company means KC, then whatever happened is within, not against

Clients will always take the company as KC, instead of management team alone IMO. Make sense?

[l0nEr]

I have attached the kingsmen article on Business Times...
http://www.mediafire.com/view/?9gvb6vamkr9cc0n

It is available on NLB website, via Library PressDisplay
http://eresources.nlb.gov.sg/index.aspx


Based on my understanding from the article...
1) the "personal agreement" is the promise of more contracts in the future.
2) A poison letter was received by SGX. which probably alerted the management, and prompted the investigation by E&Y.
I have no idea why the hired E&Y to do the investigation, instead of some other company to do it.

Will that "Personal Agreement" constitute bribery in the eyes of the law? Hmm... no idea, but honestly, it feels a bit like how SME works. Particularly if you think the contractors are even smaller SMEs. (no offence but isnt such business done in trust). If the article reported the truth of what happened, I'm more inclined to believe nothing bad will come out of the CAD report because: 1) the job of the value was completed in the end, 2) the subcontractor is trustworthy by its own merits (according to the CEO).
There is no fraud in the 2nd case... there could be however be bribery in terms of promise of future projects (depends on the scale).

I guess the poison letter is sent by the subcontractor B or some sub sub contractor, so that he can get his money back. I presume he would have thought it through that it wouldnt get him into too much trouble.

The SGD2.3m should not have been impaired away. It should have been expensed off. However, an additional cost of SGD700k is made coz the Kingsmen eventually still paid Subcontractor B "extra" money. So net net the actual financial impact is only SGD700k, which is less than SGD0.005 per share.

<vested small small, earn peanuts lose peanuts>

[Stocker]

Without the poison letter, will the management discover that eventually ?

[corydorus]

SGX may have directed Kingsmen to hire E&Y after receiving the poison letter.

The stock price was driven up prior to the halt in low volume. And the price drop is not that large after taking that into perspective.

[KopiKat]

To better understand the definition of 'Fraud or Dishonesty' under Companies Act Section 207 (9A),

(9A) Notwithstanding subsection (9), if an auditor of a public company or a subsidiary of a public company, in the course of the performance of his duties as auditor, has reason to believe that a serious offence involving fraud or dishonesty is being or has been committed against the company by officers or employees of the company, he shall immediately report the matter to the Minister.

.

(9D) In subsection (9A), “a serious offence involving fraud or dishonesty” means —

(a) an offence that is punishable by imprisonment for a term that is not less than 2 years; and
(b) the value of the property obtained or likely to be obtained from the commission of such an offence is not less than $20,000.


Perhaps Section 406 is also relevant,

Frauds by officers

406. Every person who, while an officer of a company —

(a) has by deceitful or fraudulent or dishonest means or by means of any other fraud induced any person to give credit to the company;


(b) with intent to defraud creditors of the company, has made or caused to be made any gift or transfer of or charge on, or has caused or connived at the levying of any execution against, the property of the company; or


(c ) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since or within 2 months before the date of any unsatisfied judgment or order for payment of money obtained against the company,

shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years or to both.


Reference : http://statutes.agc.gov.sg (search under Companies Act)