On Business Times:
- Auditor: Some of Linear's deals could not be proven
KUALA LUMPUR: Linear Corp Bhd's books may have been cooked since 1999, PwC said in its special audit released yesterday.
In the audit, PwC revealed that some of the sales transactions or net proceeds from trading activities could not be proven.
For example, Imux (Asia) Ltd and LCI Global, subsidiaries of Linear Corp, claimed to have recorded sales of 58,050 units of solar energy panels totalling US$41 million (RM125.3 million) to Bucumert, a Romanian company.
These panels were bought from Kinetic, a Hong Kong company, for US$34.5 million.
However, the audit revealed that the panels sold to Bucumert were delivered to two locations in China which could not be physically located. Kinetic, the so-called supplier of the solar panels, is a HK$1 company, and was set up four months prior to the start of the solar panel trading business by LCI Global and Imux Asia.
Also, Kinetic could not be located at its business address and has been gazetted to be deregistered by the Hong Kong authorities in May 2010.
The company's US$3.7 million sale of cooling tower parts to Nikki, a company based in Bangkok, was also questionable.
In the report, which cited Linear's employee and ex-senior official, the cooling tower spare parts sold to Nikki did not exist. Nikki has a paid-up capital of 3 million baht and was set up in July 1993.
It is registered as a wholesaler of motor vehicle parts and did not record any revenue from 2007 to 2009. Its business address is a three-storey residential house in Bangkok.
Late last year, Linear said it won its biggest project ever, the RM1.67 billion King Dome project in Manjung, Perak, for which it received a letter of award from a Seychelles-based company Global Investment Group Inc (GIG).
This was supposed to be the world's largest dome structure measuring 1,600 metres in diameter, housing an indoor city with retail, leisure, resort, food and beverage facilities.
Early this month, Linear said there was "no evidence of any significant progress towards the execution of the contract" and "no documentary evidence to demonstrate the overall viability of the King Dome Project".
In the PwC report, it added that the existence of the King Dome project could not be proven.
"There were no confirmations from various government authorities in respect of the King Dome Project to be located in either Perak or Johor, and it is unclear whether GIG, the promoter of the King Dome Project, has the operational and financial capabilities to deliver the Kingdome Project." said PwC in the report.
PwC said that GIG could not be contacted at its stated place of business and contact