KUALA LUMPUR (Sept 19): Kim Teck Cheong Consolidated Bhd (KTC) said today the dispute which led to the resignation of the chairman of its audit and risk management committee recently was because the majority of the board of directors had agreed not to impair the trade receivables as the management was confident that they were recoverable.

"Management had taken rigorous collection action and has to-date successfully collected approximately 20% of the long outstanding debts as highlighted by external auditors. In addition, the management has also taken further actions in securing the remaining balances (such as obtaining personal guarantee from owners of the customers, initiating legal action against the customers and more rigorous visit to the customers)," KTC said in a filing with Bursa Malaysia today.

The Sabah-based consumer packaged goods manufacturer was responding to Bursa Securities' query over the resignation of Wee Hock Kee as chairman of the group's audit and risk management committee on Sept 12.

In his resignation letter to the chairman of the board, Wee had stated that he had no choice but to step down due to the recent development in the boardroom which saw his role as the chairman of the committee being undermined.

"The board had rejected the advice of the audit and risk management committee on a significant accounting matter (a significant audit finding on impairment reported by our external auditors in their audit review memorandum) that my committee considers it cannot compromise over; and all means to resolve the disagreement had been exhausted," Wee had written.

He had also raised concern about the group's disclosure and financial reporting for the fourth quarter ended June 30, 2018 (4QFY18) unaudited results.

Wee's letter of resignation was served on Sept 4 and accepted by the board on Sept 10.

In its reply today, KTC's board dismissed concerns from Wee and the audit and risk management committee, saying the board and management are confident that these trade receivables are recoverable.

"Total third parties receivables for more than 270 days in the audit review memorandum stood at RM4.93 million. The management had subsequently recovered RM1.05 million.

"The remaining balance is recoverable through personal guarantee from owners/customers and initiating legal actions against the customers," it said.

"Thus, there is no impairment raised on the unaudited 4QFY18 results announced on Aug 30. Hence, the board is of the view that the group's 4QFY18 results will not be impacted," it added.

KTC shares closed up 1.5 sen or 8.33% at 19.5 sen, with 2.23 million shares done, bringing a market capitalisation of RM99.5 million.