PN17 firm China Automobile Parts seeks white knight as part of regularisation plan

KUALA LUMPUR (Nov 16): China Automobile Parts Holdings Ltd (CAP), whose external auditors had recently expressed a disclaimer of opinion in relation to its financial statements for the financial year ended June 30, 2022 (FY2022), said it is working on several measures to mitigate the existence of material uncertainty on going concern within the next 12 months.

In a filing with Bursa Malaysia on Wednesday (Nov 16), the automobile parts manufacturer said the management is actively trying to secure a new white knight and the company will submit an appeal on Nov 16 for further extension of time until June 30, 2023 for the company to submit a regularisation plan to the regulatory authorities.

"The management is proposing to dispose of CAP to an external party as part of the proposed regularisation plan," it added.

Barring any unforeseen circumstances, the company expects to resolve the issues relating to the qualified opinion in the coming financial year, it added.

On Nov 11, CAP announced that its external auditor Russell Bedford LC PLT had cast doubt on the ability of the company to continue as a going concern as it was unable to obtain sufficient and appropriate audit evidence to ascertain the appropriateness of the preparation of the financial statements for FY2022.

It had incurred a net loss of RMB3.42 million for FY2022. As at end-June, it has net current liabilities and capital deficiency of RMB7.03 million.

In January 2018, CAP was classified as a Practice Note 17 (PN17) company after its former external auditor Messrs PFK expressed an audit disclaimer of opinion in the company’s audited financial statements for FY2015 on undisclosed material liabilities.

CAP shares have been suspended from trading since June 8, 2017, after it failed to release its financial reports within the stipulated time.