KUALA LUMPUR (Aug 18): Lambo Group Bhd said it was unaware of any wrongdoing related to its indirect wholly owned subsidiary Fujian Accsoft Technology Development, after China's finance ministry imposed a penalty on the subsidiary's auditor last month.

Referring to an article on the sinchew.com.my website on July 13 relating to the penalty, Lambo said it was only made aware of the article by Bursa Malaysia Securities on Wednesday.

“At this juncture, the company is not aware of any wrongdoing in connection to Fujian Accsoft. Nevertheless, the company will verify the contents of the article and to take necessary action, if any,” Lambo said.

“The company reserves all comments and shall make the necessary announcement(s) as appropriate when there are further developments to this matter,” said the company in a bourse filing.

China’s Global Times reported in July that the country's finance ministry had imposed an administrative fine against an accounting firm for cross-border accounting audit supervision on Fujian Accsoft.

“The Ministry of Finance issued a warning to Zhongxingcai Guanghua Certified Public Accountants (the accounting firm), confiscated 60,000 yuan of illegal income, imposed an administrative penalty of 300,000 yuan and revoked the CPA [certified public accountant] certificate of accountant Meng Xiang who gave his signature,” the report said.

The report also stated that Fujian Accsoft’s 2016-2018 financial report was seriously falsified and constitutes a suspected crime, and that the accounting firm should take major responsibility for the audit of the financial statement amid severe lack of audit procedures.

The ministry’s inspection also found that Fujian Accsoft continued to see losses from 2016 to 2018 and it had no more than five employees during the time.

In addition, the firm’s annual operating income also never exceeded 60,000 yuan, and total losses were 30,100 yuan, 46,000 yuan, and 86,200 yuan respectively.

“At the end of 2018, the firm's bank deposits were less than 50,000 yuan and it did not hold any wealth management products,” said Global Times.

Fujian Accsoft, which is involved in software development, internet information services, enterprise management and consulting services, was dissolved in May this year, the report stated.

Lambo’s share price which has depreciated 37.5% year-to-date, closed at five sen on Thursday. The company has a market capitalisation of RM77.02 million.