Axis Inc Lodges Police Report!

Oh no!!!!

Just when I thought I could have a nice weekend enjoying the World Cup, I noticed this news clip on the Edge Financial Daily: Axis Inc directors lodge police report over missing records

• KUALA LUMPUR: AXIS INCORPORATION BHD 's board of directors has lodged a police report over several official documents and records belonging to Axis and its units which have gone missing.
  
  It said on Friday, June 11 that it had on Wednesday lodged the report over the missing records of the company and its units Asiapin Sdn Bhd, Chongee Enterprises Sdn Bhd and GBC Marketing Pte Ltd from 2004 to 2008 at the offices in Johor Baru, Tangkak and in Singapore.
  
  The missing records included documents in relation to the purchase of machinery sent to contract manufacturers in Cambodia and/or Vietnam; bank statements and cheque butts; payment vouchers and supporting documents for payments made to the contract manufacturers in Cambodia.
  
  Also missing were documents, letters, e-mails and correspondences between Axis group and the contract manufacturers; documents in relation to the orders placed with the contract manufacturers by buyers; documents of raw materials bought for the contract manufacturers (ncluding purchase orders and delivery orders).
  
  The report also claimed that documents on the account of monies received from the Bumiputera issue in 2004 and the sale of Ganad assets in 2007-2008 were missing.
  
  "As a result of the above missing records, Axis Group of companies in 2009 had to write off substantial amount of its assets and receivables due to the lack of documentary support of these assets and receivables," it said.
  
  The company said the present Axis Board was unable to answer certain queries posed by Bursa Malaysia Securities Bhd.

Dear lord!!!

Let me get this correct.

Axis Inc is blaming that because of these missing documents, Axis Inc had to write off substantial amount of these assets and receivables!

• .. lodged the report over the missing records of the company and its units Asiapin Sdn Bhd, Chongee Enterprises Sdn Bhd and GBC Marketing Pte Ltd from 2004 to 2008 at the offices in Johor Baru, Tangkak and in Singapore.

Gee how nice!

Now I had written on Axis before. Aug 2008, I wrote A Deeper Look At Axis Inc.

Let me reproduce one of the compiled tables here again.

Clearly visible and questionable was the 2006 fiscal year earnings, in which its earnings slumped big time from 14 mil to 8 million but the massive sudden increase in loans from 85 million to 184 million stood out sorely. Receivables jumped insanely from 82 million to 166 million!

The next fiscal year 2007, Axis had a bumper year! Axis Inc the stock had a bumper year too!

Bumper year means good stock, yes? Apparently, the market liked what it saw when Axis net earnings jumped from 8 million to 25 million!

But sadly, the market discounted the incredible balance sheet weakness! (see the above compiled table again). Loans soared to an incredible 240 million and trade receivables stood out sorely at 200 million!

Today, Axis is saying "As a result of the above missing records, Axis Group of companies in 2009 had to write off substantial amount of its assets and receivables due to the lack of documentary support of these assets and receivables,"

Consider the fact that record profits helped drove up the stock in 2007.
Consider the fact that the record profits came with the insane jump in receivables!

Now all the records and documents are all missing! Would anyone be able to examine the debt aging reports? Will anyone understand why the receivables jumped? And without these records, how could anyone determine the validity of the profits made in 2007, since the documents are all missing?!!

WOW!

Like this also can!

What a wonderful world we live in!

Are we all Ah Bengs and Ah Lians???

First we have the Kenmark CEO saga. Now apparently Axis wants its throne back!

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ps:

I wrote on Axis back on 31st July 2008: Regarding The Plunge Of Axis!!

This was followed by A Deeper Look At Axis Inc and then by More On Axis Inc and Update on Axis Inc.

In the posting More On Axis Inc

• The external auditor, Messrs Horwath are unable to obtain sufficient appropriate audit evidence and explanations to ascertain the following:- (b) the recoverability of the outstanding balances due from the Contract Manufacturers (net of the settlement subsequent to 31 March 2008) in relation to the trade receivables and advances)

Axis since then saw the company being hit by huge provision of bad debts and then served with writ of summons by its banker, Maybank and later saw its auditors, BDO Consulting Sdn Bhd, alleging that 'some serious discrepancies with regard to transactions that had led to earlier write-offs from the company’s books'.

Do see this brilliant article on Star Businessweek: Once rescuer Axis now needs rescue