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Further to the announcement made on 9 January 2009, 12 January 2009, 14 January 2009 and 22 January 2009, the Board of Directors of SCAN (“Board”) wishes to announce that the Company had on 22 January 2009 appointed Abu Bakar Rajudin (Corporate Governance Services) Sdn. Bhd. as an Forensic Auditor (“FA”) to conduct an investigative audit relating to, amongst others, the possible financial impact of the misappropriation of funds (as announced on 14 January 2009) to SCAN Group and its subsidiaries (“SCAN Group”).
The Board wishes to inform that the FA has completed the investigative audit and the Board received a report from the FA dated 2 March 2009 which the Board had deliberated. The following is a summary of the critical findings of the report:-
a) There was a manipulation of earnings to show a growth in revenue by issuing invoices (for projects which had not been implemented) to a partner company in Saudi Arabia amounting to approximately RM 2.5 million in the financial year ended 2005 and taking the amount as revenue for that year.
b) A subsequent manipulation of earnings to show a growth in revenue recorded in the year 2007 where SCAN issued invoices to a partner in Syria amounting to approximately RM 4.3 million for the purportedly Consultancy Services for the ICT Security Handbook of Syrian Arab Republic.
c) A business transaction with a supplier which did not involve the delivery of items but a payment of approximately RM 1.7 million was made to the said supplier.
d) There were manipulated records of settlement of its trade receivable namely, the partner in Saudi Arabia as mentioned in (a) above, for an amount of approximately RM 1.7 million whereby the settlement of the original invoice which was made through deduction of the commission earned by the partner in Saudi Arabia and by cash received from third party and the then Chief Executive Officer of the Company.
The financial impact of approximately RM 5.86 million based on the above findings will be reflected as a prior year adjustments in the unaudited quarterly financial report for the fourth quarter ended 31 December 2008.
This announcement is dated 18 March 2009. |
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