Thursday 28 Mar 2024
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KUALA LUMPUR (March 11): Multi-Usage Holdings Bhd has been advised to lodge reports with the relevant regulatory authorities and take legal action against the “certain directors” allegedly misappropriating funds and conducting dodgy practices at the expense of the company.

Multi-Usage's filing with Bursa Malaysia today served as a response to the exchange’s query on what the findings of the special audit report by UHY FLVS Sdn Bhd entailed, and if they could bring any potential impact to the company’s legal, financial and operational aspects.

Further to its previous filing saying it had appointed a legal adviser upon UHY’s recommendation in the special audit, Multi-Usage said today that the company agreed to lodge reports with the relevant regulatory authorities, and examine and obtain further documents that may be available in public domain, in connection therewith.

Multi-Usage will also initiate legal action to recover any unsanctioned and undisclosed benefit in connection with the debt restructuring exercise, it said.

Legal action also will be taken to recover late payment interest and property values arising from disposal of the five properties, to a director and person(s) connected to the director, depending on whether the set-off claim is shown.

“UHY recommended that management should take serious consideration [in] identify[ing] any transaction that may give rise to potential conflict of interest and assessment of whether there are any breaches of relevant legislations,” Multi-Usage said.

Last November, Multi-Usage announced it had appointed UHY to carry out a special audit on complaints made against its directors, which the company did not name. There were allegations of benefit to the directors from a debt restructuring exercise, payments made by a Multi-Usage subsidiary to a company related to a director, and benefits derived by a director when the company bought properties.

Multi-Usage also said there were allegations against the directors of falsification of the company’s documents to obtain information from a third party, and payments made to a person and companies linked to a director.

Following this, Multi-Usage said UHY had recommended the company seek legal advice to understand whether there is “any legal remedy or means by which Multi-Usage Holdings could recover any illegitimate payments.”

“UHY also recommended [that] a review of operations be undertaken to ensure adequate controls and processes are in place,” it added.

There is no immediate financial impact on the company, it said.

However, if Multi-Usage succeeds in recovering the lost amount, it would impact the company’s financials positively — save for outlay of legal costs.

“The other potential financial and legal impact would be possible claim by the special purpose vehicle (SPV) in the event Multi-Usage is unable to produce valid titles of the five properties used in the set-off of advances from SPV.”

Multi-Usage shares fell half a sen to close at 92.5 sen today, bringing it to a market capitalisation of RM52.19 million.

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