KUALA LUMPUR (Dec 5): Revenue Group Bhd has found that there was an absence of standard operating policies and procedures in relation to the group’s supplier management and non-trade purchases, following a completed internal special review of its procedures for the checking of payment transactions.

In a filing with Bursa Malaysia on Tuesday, Revenue Group said the special review, covering the period from Jan 1, 2021 to Dec 31, 2022, was carried out in response to the purported irregular transactions allegedly perpetrated by its former directors Brian Ng Shih Chiow and Dino Ng Shih Fang.

The review, conducted by GovernanceAdvisory.com Sdn Bhd (GASB), also found that purchases and accounts payable procedures were not consistently practised in accordance with standard procedures.

The appointed reviewer observed that there were also incomplete supporting documents for payments made by the group due to the absence of procedures to document and govern the movement, retention and retrieval of documents.

Besides that, the delegation of authority matrix was not regularly reviewed and updated by the management under the former executive directors, namely the Ng brothers.

GASB was appointed on Feb 28 this year, and the final report of its observations, together with comments from the audit and risk management committee, was submitted to the senior management of Revenue Group on Aug 30.

Following the observations made by the reviewer, Revenue Group said the current management of the group has taken the steps to implement the recommendations put forth by GASB.

The efforts include the establishment of procedures on goods received and stock movement tracking, ensuring that documents and files may only be accessed by the respective personnel from each function within finance department, the establishment of a clear handover procedure for resigned staff, and realigning the delegation of authority matrix to be in line with the group’s corporate disclosure policy by including the board in the authority matrix for statutory and corporate matters.

On top of that, Revenue Group had on April 17 formed a procurement committee whose approval is required before any new purchases can be made.

"For non-trade related purchases, requisition needs to be made by the respective department heads and supported by relevant justifications," the group said.

Revenue Group assured that as at Oct 1, 2023, all of the recommendations put forth by GASB have been fully implemented, and that the newly implemented SOP will be subject to internal audit follow up review in the first quarter of 2024.

"In this regard, Kloo Point Risk Management Services Sdn Bhd has been appointed on June 8, 2023 as the group’s internal auditor in place of GASB to conduct the follow up review," it said.

"Moving forward, the group will undertake an internal audit review on an annual basis and such review will have to encompass the financial reporting function (as this was not consistently performed in the past)," Revenue Group added.

Revenue Group was embroiled in a boardroom tussle after it suspended the executive functions of its co-founders Shih Chiow and his younger brother Shih Fang in January, pending an investigation over "certain complaints" against them. The brothers have since resigned from the board and ceased to be substantial shareholders of the group.

In February, Revenue Group announced that two of its directors were arrested by the MACC over an alleged false claim relating to the purchase of thermal printing paper worth more than RM400,000.

The duo was later charged in the Sessions Court with fraudulently causing a bank employer to sell a vehicle belonging to the company without a resolution from the board of directors.

In June, Shih Chiow was charged in the Sessions Court with 12 counts of forgery of invoices and purchase orders amounting to RM13.829 million with the purpose of cheating the company.

Both of them pleaded not guilty to all the charges.

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