Singapore exchange authority probes company linked to Mirzan Mahathir

(FMT) – The regulatory authority of the Singapore Exchange (SGX), SGX RegCo, is investigating a company linked to Mirzan Mahathir over possible violations of listing rules.

Mirzan, son of former prime minister Dr Mahathir Mohamad, has been a significant shareholder of the company, SBI Offshore, since September 2014 after purchasing 10.8% of the company through a private placement, The Edge Singapore reported.

The probe comes after the release of a special audit pushed by SGX Regco in December 2018 into the company’s sale of a factory in China at a significantly discounted price.

While the audit decided that the company had gone through an “adequate and reasonable” process in trying to sell the factory, it found other issues related to the factory, the report said.

Although the RMB18 million paid was the best offer at the time compared to its book value of between RMB38 and RMB40 million, the acquisition agreement did not have enough details on the assets that were to be acquired when SBI Offshore bought the factory.

The audit also found that valuations were not conducted to assess and support the purchase consideration of RMB32 million.

The company also spent RMB8.19 million for construction and renovation works before entering into the acquisition agreement for the factory, although it was supposed to acquire a completed factory.

“The factory was eventually underutilised and accumulated losses of more than RMB47 million for the period up to Dec 31, 2017,” said SGX RegCo.

In addition to the purchase price of RMB32 million, the company incurred around RMB15 million in capital expenditure until 2013 for the factory.

In an announcement signed by Mirzan, the company said it was aware of the possible violations of laws and listing rules, adding that “will assess the findings and determine the appropriate course of action in the best interests of the group and the shareholders”.