- KUALA LUMPUR: ACE-market listed DIS Technologies Holdings Bhd has discovered a possible misstatement of sales to the tune of RM131.33 million spread over two financial years 2008 (FY08) and 2009 (FY09) due to fraudulent activities.
DisTech (DIST) said the alleged fraud was reported by a major customer, Starlight Marketing Ltd, involving one of the latter’s staff. It said the sales totalled RM131.33 million over six quarters starting July 1, 2008 and the total owing as at Dec 31, 2009 to the group was RM82.07 million, an amount that “was significant to the company”.
“The misstatement of financial results for DIST and its subsidiaries is expected to have a material impact on the financial effects of the group,” said DIST in a statement to Bursa Malaysia Securities yesterday.
Upon its request, the company’s securities were suspended from trading with effect from 4.37pm yesterday until further notice, pending the material announcement.
The stock was traded unchanged at 4.5 sen prior to the suspension.
DIST, which is in the business of manufacturing and selling consumer electronics, has been incurring losses for the past two years.
For FY09, despite revenue increasing to RM181.5 million from RM139.3 million in FY08, the group remained in the red to the tune of RM578,000, though it was an improvement from a loss of RM815,000 in FY08.
According to the notes accompanying its fourth-quarter announcement, DIST said the losses were due to provision for impairment of goodwill, allowance for doubtful debts and inventories written off.
This article appeared in The Edge Financial Daily, March 09, 2010.
Another Accounting Fraud?
Sigh.
But there's no need to panic because if you are an investor, there's probably no way you could have invested in such a stock.
I took a peep at their last reported earnings in Feb 2010, Quarterly rpt on consolidated results for the financial period ended 31/12/2009
The tell tale signs are there in the balance sheet.
Why the massive spike in trade receivables?
Why the massive shrinkage in inventories?
What? Discovered? Possible mistatement to the tune of RM131.33 mil? Over 2 years? Reported by a major customer?
ReplyDeleteI can't imagine a company directors do not know about this! Halo.. it is RM131.33 mil.
100 years old not die also got fantastic news to read.
To achieve a sales of RM100mil for a ACE market company is commendable.
ReplyDeleteHowever, would you not relook again at the sales figures because it is an ACE company?
To have it over six quarters and not spotted, it is quite hard for a normal guy to believe there is no colloboration internally. here does it went wrong, Moolah? Are the enforcers' sniffer dog put to sleep??