New PN17 entrant Zelan terminates CEO’s contract

• “The company has decided to terminate the CEO’s contract of employment by giving him three month's salary in lieu of the required notice as per his contract,” said Zelan in a bourse filing on Thursday (June 15).

KUALA LUMPUR (June 15): Construction engineering company Zelan Bhd has decided to terminate the contract of its chief executive officer (CEO) Hazimi Baharum.

“The company has decided to terminate the CEO’s contract of employment by giving him three month's salary in lieu of the required notice as per his contract,” said Zelan in a bourse filing on Thursday (June 15).

Hazimi joined Zelan in March 2010 as head of special projects and was promoted to chief operating officer in February 2012 before leaving the company in 2016 to pursue other career opportunities.

He rejoined Zelan in 2020 and was named acting CEO in March before being appointed as CEO in September.

Last month, Zelan fell into the Practice Note 17 status after its external auditors Nexia SSY PLT expressed a disclaimer of opinion on its audited financial statements for the financial year ended Dec 31, 2022 (FY2022).

The auditors noticed an unreconciled aggregate intercompany balance difference of about RM30.789 million between receivables and payables in Zelan's opening balances that was not eliminated in arriving at Zelan’s consolidated financial statements.

It also noted that Zelan's unit, Zelan Holdings (M) Bhd, posted a net balance receivables of RM241.76 million as at end-FY2022, which needs to be fully impaired. This adjustment would cause the group's total assets to be reduced to RM559.56 million, while its total liabilities of RM715.72 million would exceed total assets by RM156.16 million.

Zelan appointed Nexia as its external auditor in December last year after the resignation of its previous auditor Messrs Afrizan Tarmili Khairul Azhar PLT, who was sanctioned by the Securities Commission Malaysia's Audit Oversight Board for several breaches involving non-compliance with auditing standards.

Zelan’s share price was last traded at 3.5 sen, with a market value of RM25.88 million.