This article first appeared in The Edge Financial Daily, on March 9, 2016.

KUALA LUMPUR: The special audit initiated by the board of Multi-Usage Holdings Bhd (MUH) shows that a special-purpose vehicle (SPV) called Wealthy Achiever Sdn Bhd is connected to certain directors.

In an announcement to Bursa Malaysia, MUH said it will take action on the findings of the special audit report after consultation with legal adviser Messr Izral Partnership.

The board will also deliberate on the findings of the special audit report at a board meeting tomorrow to determine if the report has any legal, financial and operational impact on the company.

The special audit shows that the SPV made an estimated profit of RM10.4 million from the company’s debt restructuring exercise in 2009.

According to a filing with Bursa Malaysia yesterday, the findings of the special audit included the following:

• The five properties, which were used to set off RM1.2 million of debt owing to the SPV arising from the restructuring exercise, appeared to have been sold earlier to a third party.

• The payment of RM4.9 million to the financial institution on behalf of the SPV was made by a company related to certain directors, said the announcement.

• A director of MUH had signed SPV’s general cash voucher and letter (containing SPV’s cheque information) issued to a financial institution.

• An amount owing by MUH to SPV of RM520,000 was set off against a property purchased by a son of a director and was eventually transferred to the director’s brother-in-law.

• The SPV also helped a certain director of MUH settle his personal guarantee with a financial institution and a previous director of the SPV is the brother-in-law of one of MUH’s directors.

• The SPV had instructed MUH to repay RM1.7 million to specific parties. Of the RM1.7 million, RM1.4 million was made to a third party and a company connected to a son of a director as instructed.

On complaints about benefiting from a position as director during acquisition of properties from MUH, the special audit shows that a director of MUH and his brother acquired five properties from a subsidiary of MUH in 2002 and 2007. However, the payment was not made in accordance to the terms stipulated in the sale and purchase agreements.

The payment was later set off with the amount owing to the director by MUH. Announcements of the related-party transactions were only made on June 18 and 19, 2015. Based on terms of the agreements,  the estimated interest on late payment chargeable amounted to approximately RM104,395.

On the suspect of possible falsification of company documents to obtain information from a third party, the special audit reveals that the letterhead used by a director to request for information from a bank is different from the current official letterhead used by MUH. “The requisitionists who signed as directors of the subsidiary had in fact resigned as directors of the subsidiary as of the date of the letter,” said the announcement.