Caely's forensic auditor quits as crucial information needed for audit gone missing

KUALA LUMPUR (June 13): Caely Holdings Bhd has announced that its auditor, Virdos Lima Consultancy (M) Sdn Bhd, could not continue with its forensic audit as critical information is not available.

In a Bursa Malaysia filing, the board of Perak-based lingerie maker said its external auditor has notified it that for various financial periods, key documents such as, but not limited to, invoices, payment vouchers, receipts, and agreements, could not be located. On top of that, various company electronic devices that were assigned to key suspects in their investigations had been removed and/or could not be located at the premises of Caely.

"These electronic devices may contain key Electronic Stored Information such as, but not limited to, email communications, documents, spreadsheets, presentations, etc," the board said in the filing.

This information, the auditor said, was vital for them to form their investigation conclusions as it sought various complex and unusual accounting entries that were entered into Caely's wholly-owned subsidiary Caely (M) Sdn Bhd's accounting general ledger that would require to be traced, checked, and verified against supporting documents.

Caely appointed Virdos Lima in early April to conduct a forensic audit on allegations of suspicious and irregular transactions at Caely. The appointment came after one of its independent non-executive directors received an anonymous package containing documents, raising concerns over several suspicious transactions involving Caely, as circumstances that led to the forensic investigation.

On April 20, the lingerie maker announced that the Malaysian Anti-Corruption Commission (MACC) had issued a freeze order on all the operational bank accounts of the company and its subsidiaries. Two of its board members, namely executive director and chief executive officer Lim Chee Pang and independent non-executive director Lim Say Leong, subsequently resigned on April 29.

On May 18, three shareholders of the troubled lingerie maker who collectively held at least 10% of the company called for an extraordinary general meeting (EGM) to discuss various issues, including the removal of its newly appointed executive chairman Wong Siaw Puie and six other existing directors.

The EGM is slated to be held on Wednesday (June 15).

On June 2, the group redesignated Wong as group executive vice chairperson. This was her second redesignation within two months. She was redesignated to be the executive chairman on May 17 when she was an executive director. She joined Caely's board as an executive director on April 28.

The group clarified on June 3 that the freeze order on its bank accounts still stood, two months after the MACC suspended its accounts.

For the fourth financial quarter ended March 31, 2022 (4QFY22), its net loss shrank to RM9.29 million from RM23.46 million due to an improvement in property development cost on account of lower provision of impairment amounting to RM7.2 million.

Quarterly revenue slipped 17% to RM10.66 million from RM12.85 million partly due to the sale cancellation amounting to a reduction in revenue of RM4.2 million.

Shares in Caely finished unchanged at 38 sen on Monday, giving it a market capitalisation of RM98.13 million.