Auditors troubled as Sino Techfibre investigation remains unsolved

KPMG’s probe was impeded by the Local Tax Bureau, who refused to provide the listing of the company’s subsidiaries’ sales and purchase invoices.

Manufacturing company Sino Techfibre announced on 24 May 2011 that it had appointed KPMG Services Pte Ltd as special auditors to inter alia provide independent investigation into the audit issues raised in earlier announcements released on 14 and 21 April 2011 respectively.

According to KPMG’s report, they were not given access to five of the six computers used by the company’s and its subsidiaries’ employees in order for them to perform their forensic technology procedures, and that the Local Tax Bureau refused to accede to the company’s request for copies or a summary As a result, KPMG was not able to complete their entire scope of engagement.

This means that the discrepancies highlighted by the company’s auditors, Ernst & Young LLP, which the company has announced on 14 April 2011, remain unresolved.

In light of this, the Audit Committee has decided, as a preliminary step, to recommend the appointment of a firm of valuers, to carrying out a valuation of the company’s assets and liabilities to ascertain what is, in the opinion of the valuer, the current value of the company. The Audit Committee also hopes that a valuation may help reconstruct the company’s accounts which were lost in the fire.

The Audit Committee will also seek professional advice on a further course of action.