SGX slams Jason Holdings Limited and ex CEO over Catalist violations

It overstated its half-year revenue in 2015.

The Singapore Exchange (SGX) hit Jason Holdings Limited with its former executive director and CEO Jason Sim Chon Ang for breaking the Catalist Rules. The company had overstated its revenue in its half-year financial results in 2015, according to auditors from Ernst and Young. 

“In complying with the Exchange’s disclosure requirements, the content of each announcement should be factual, clear and succinct,” SGX said.

According to SGX, the overstatement was a result of Sim instructing and authorising the inclusion of Undelivered Materials in progress claim billing to customers.

“Mr. Sim also submitted falsified supporting documents to obtain short term trade financing facilities from banks for JHL’s principal subsidiary, Jason Parquet Specialist (JPS),” the agency said.

The investing firm reported that Sim explained that the the high profit margins were due to “JPS’ cost cutting measures and bulk discounts obtained from JPS’ suppliers”.

According to the deliberation, Sim has breached Catalist Rule 720 and 406 that “requires directors and management to demonstrate character and integrity expected of directors and management of listed issuers”.

With this, SGX believes that Sim “failed to carry out his fiduciary duties and did not act in the interests of shareholders as a whole.”

Based on sub-contractor and customer contracts, the sub-contractors are allowed to bill main contracts progress payment for work done and materials supplied to the project sites. Prematurely delivered materials in the preceding calendar month are not to be billed.

“As such, JPS is not entitled to claim for materials that have not been delivered to the project sites,” SGX said.

According to SGX, JPS obtained Accounts Receivables Financing from banks when it did not have sufficient funds when a Trust Receipt is due for repayment. They added that banks provide Accounts Receivable Financing based on progress claims billed by JPS to the main contractors.