KUALA LUMPUR (Aug 12): Zelan Bhd (KL:ZELAN), a Practice Note 17 (PN17) company, has appointed Mohd Ariff Abd Samat as its new chief executive officer, about a year after the construction engineering company terminated the contract of its previous CEO Hazimi Baharum.

Mohd Ariff has over 18 years of experience in key positions of internal audit, accounts and reporting, and business planning and budgeting in the oil and energy industry, according to Zelan's bourse filing on Monday.

Prior to joining Zelan, Mohd Ariff served as group chief operating officer at Sarawak Consolidated Industries Bhd (KL:SCIB) until July 2023. Before that, he was the general manager for special projects at Serba Dinamik Holdings Bhd (KL:SERBADK).

Zelan was categorised as a PN17 company in May last year after its external auditor Nexia SSY PLT expressed a disclaimer of opinion on its audited financial statements for the financial year ended Dec 31, 2022 (FY2022).

The auditor noticed an unreconciled aggregate intercompany balance difference of about RM30.79 million between receivables and payables in Zelan's opening balances that was not eliminated in arriving at Zelan’s consolidated financial statements.

Nexia also noted that Zelan's unit, Zelan Holdings (M) Bhd, posted a net balance receivables of RM241.76 million as at end-FY2022, which needed to be fully impaired. This adjustment would cause the group's total assets to be reduced to RM559.56 million, while its total liabilities of RM715.72 million would exceed total assets by RM156.16 million.

About three weeks after falling into PN17 status, the group terminated the contract of its then CEO Hazimi before the actual expiry of the contract of employment. Without disclosing any particular reason for the termination, Zelan said it gave Hazimi his three month's salary in lieu of the required notice as per his contract

Zelan's shares settled unchanged at six sen on Monday, giving the group a market capitalisation of RM50.7 million.