This article first appeared in The Edge Malaysia Weekly on November 11, 2019 - November 17, 2019

Last month, Crowe Malaysia PLT, Barakah Offshore Petroleum Bhd’s independent auditors, expressed a disclaimer of opinion on the company’s audited financial statements for the year ended June 30, 2019.

Crowe Malaysia said it had not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion to ascertain the appropriateness of the preparation of the financial statements of the group and the company on a going concern basis.

It went on to say that for the financial period from Jan 1, 2018, to June 30, 2019, the group incurred a net loss of RM383.21 million, and as at June 30, 2019, the group’s current liabilities exceeded its current assets by RM145.69 million. Barakah also had a deficit in shareholders’ equity of RM188.76 million while its total borrowings amounted to RM186.36 million.

This is not the first time the auditors had raised concerns over the offshore service provider. On May 2 last year, Barakah announced that its auditors, Crowe Horwarth, had raised  a material uncertainty over the group as a going concern in respect of its financial statements for FY2017 ended Dec 31.

But since then, has anything been done to improve things at Barakah?

On May 17, it fell into PN17 category after receiving a notice of demand from Export-Import Bank of Malaysia Bhd for the failure of its subsidiary, Kota Laksamana 101 Ltd, to make instalment payments. Then, in October, Barakah and its potential white knight, Lecca Group Ptd Ltd, mutually agreed to terminate agreements related to the former’s proposed regularisation plan.

Just what is going on at Barakah? What is the board’s plan now for the group and will anyone be held accountable for the troubles at the company?

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