KUALA LUMPUR (Oct 25): Singapore-listed Raffles Education Corp Ltd said it had on Tuesday (Oct 19) received an order jointly issued by the Monetary Authority of Singapore and the Commercial Affairs Department (collectively known as authorities) requiring the company to provide certain documents relating to loan facilities extended by Affin Bank Bhd to Raffles Education's subsidiaries Raffles K12 Sdn Bhd and Raffles Iskandar Sdn Bhd in connection with an investigation into a potential offence under Chapter 289 of Singapore’s Securities and Futures Act (SFA).

"The company (Raffles Education) understands that: (1) on Oct 19, 2021, certain current directors of the company, namely Chew Hua Seng (chairman and chief executive officer), Lim How Teck (lead independent non-executive director), Joseph He Jun (non-independent non-executive director), Ng Kwan Meng (independent non-executive director) and Gan Hui Tin (independent non-executive director), together with Doris Chung Gim Lian, a director and key management of Raffles K12 and Raffles Iskandar (collectively known as relevant individuals) attended interviews with the authorities in relation to the investigations; and (2) in connection with the ongoing investigations, the relevant individuals were notified that a possible offence under Section 203 of the SFA has been committed, and as part of the usual procedure, they have surrendered their passports to the authorities,” Raffles Education said in a filing with the Singapore Exchange on Thursday and Friday (Oct 21 and 22).

Raffles Education had, however, not specified in the filings the nature of the potential offence or explained how the Affin Bank loans to Raffles K12 and Raffles Iskandar are linked to the potential offence.

At the time of writing on Monday (Oct 25), Bursa Malaysia-listed Affin Bank had not issued a statement to Bursa or made an announcement on the bank’s website in response to Raffles Education's Oct 21 and Oct 22 Singapore Exchange filings on the investigation by Singapore authorities. 

Raffles Education said that as at the date of the announcements, no further conditions or restrictions were imposed on the relevant individuals and none of them has been placed on bail, arrested or charged with any offence.

According to Raffles Education, the company understands that the relevant individuals have cooperated, and will continue to fully cooperate with the authorities on the investigations. 

"Each of the relevant individuals has undertaken to inform the company of the ongoing investigations and the subsequent developments. The company will monitor the progress of the investigation and will make further announcements as and when there are material developments,” Raffles Education said.

"In the interim, the relevant individuals will continue to serve as directors and/or executive officers of the company (as may be applicable)," said Raffles Education, which had however indicated in the Oct 21 and Oct 22 filings that material information relating to the claim by Affin Bank had been disclosed in Raffles Education's announcements dated July 29, Aug 11, Aug 23, Aug 25, Aug 30 and Sept 9 this year.

"In the circumstances, the company believes that the investigations will not compromise the ability of the directors to discharge their duties as directors of the company,” Raffles Education said in the Oct 21 and Oct 22 filings.

In the July 29, 2021 filing, Raffles Education said Affin Bank had on May 27, 2021 via Malaysia’s High Court filed writs and statements of claim (collectively writs) against Raffles Education, its wholly-owned subsidiary Raffles K12 and subsidiary Raffles Iskandar to seek from Raffles K12 and Raffles Iskandar an immediate repayment of the entire combined outstanding amount of approximately RM410 million linked to two loan facilities from Affin Bank.

Raffles Education said the writs relate to certain alleged non-repayments under loan agreements entered into by Raffles K12 and Raffles Iskandar respectively as borrowers with Affin Bank.

According to Raffles Education, Raffles K12’s loan agreement was dated July 21, 2016 while Raffles Iskandar’s loan agreement was dated Feb 14, 2017.

"Raffles K12 and Raffles Iskandar have had discussions with Affin Bank prior to and immediately after its receipt of the writs and had also sought advice from Malaysian legal counsels on the writs (including its merits). Having regard to the foregoing, the board (of Raffles Education) is of the view that the actions brought, and claims under, the writs are unmeritorious. 

"The board wishes to further update that the company (Raffles Education) and the borrowers have reached a settlement with Affin Bank on the amicable resolution of the matters under the writs and understand that the writs will be withdrawn upon the formalisation of such resolution. 

"The company will make further announcements as and when there are material developments on the above matter, including if and when there is a formal withdrawal of the writs by Affin Bank,” Raffles Education said then.

At Bursa’s 12:30pm break on Monday (Oct 25), Affin Bank’s share price settled up one sen or 0.57% at RM1.75, valuing the group at about RM3.68 billion.

Affin Bank has 2.1 billion issued shares, according to its latest quarterly financial report.