China Automobile Parts’ external auditor resigns in less than 2 years after appointment

China Automobile Parts’ external auditor resigns in less than 2 years after appointment
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KUALA LUMPUR (May 20): Messrs CAS Malaysia PLT has resigned as Practice Note 17 (PN 17) China Automobile Parts Holdings Ltd’s (CAP) external auditors with immediate effect.

In a filing on Friday (May 20), CAP said it accepted CAS Malaysia’s resignation as its auditors after a notice of resignation dated May 19 was received by the group on Friday.

CAP said it “is not aware of any other matters that need to be brought to the attention of the shareholders” of the group, adding that it will appoint new auditors in due course.

CAS Malaysia was first appointed as CAP’s external auditor on July 24, 2020, according to prior filings.

In October last year, the Securities Commission reprimanded CAP’s former group executive chairperson Wang Yunyun and its former managing director Li Guo Qing, and former non-independent non-executive vice-chairman Ong Juan Tee for allowing the submission and authorising the issuance of CAP’s prospectus that contained financial statements that were false or misleading, and knowingly permitting the furnishing of false or misleading financial statements to Bursa Malaysia.

SC also reprimanded CAP executive director Chen Xunze and two of CAP’s former chief financial officers, Lai Fong Ling and Chai Wai Teck, for knowingly permitting the furnishing of false or misleading financial statements to Bursa Malaysia.

The regulator said that between 2013 and 2018, the group had furnished false or misleading financial statements to Bursa Malaysia due to an overstatement of one of its former units’ — Quanzhou FenSun Automobile Parts Co Ltd — bank balances.

Additionally, the SC said CAP failed to disclose litigations in relation to bank loan defaults by FenSun and did not recognise outstanding liabilities of FenSun’s bank loans in its financial statements.

FenSun is one of two CAP units it had deconsolidated during FY17, as the management had determined that control over these subsidiaries had been lost. The other deconsolidate subsidiary was China Automobile Parts (Hong Kong) Holdings Ltd.

CAP shares finished up half a sen or 50% at 1.5 sen on Friday, giving it a market capitalisation of RM15.32 million.

Esther Lee