Disclaimer opinion: Meridian’s auditors couldn’t verify FY2025 opening balances due to missing records

• In a filing with Bursa Malaysia on Wednesday, the auditors said the company was unable to provide fundamental accounting records and supporting documentation necessary for their audit procedures.

KUALA LUMPUR (Oct 8): Property developer Meridian Bhd’s (KL:MERIDIAN) external auditor Morison LC PLT said they issued a disclaimer of opinion for the company’s financial year ended May 31, 2025 (FY2025) accounts due to serious financial issues, including missing records that prevented verification of opening balances.

In a filing with Bursa Malaysia on Wednesday, the auditors said the company was unable to provide fundamental accounting records and supporting documentation necessary for their audit procedures.

Missing records included those needed to verify opening balances of assets, liabilities, equity, income and expenses and to assess the comparative information presented.

Other key issues include:

• Unresolved property titles: RM54 million worth of properties still registered under a wound-up former subsidiary. Meridian recorded RM38.8 million in impairments and RM10.2 million in inventory write-downs, but the auditors couldn’t confirm the accuracy.
• Loan dispute: A RM2.97 million loan was transferred between subsidiaries without bank approval. The bank holds Meridian liable as the guarantor.
• ZKP Development Sdn Bhd: The auditors were unable to obtain records of this key subsidiary, affecting the reliability of the consolidated accounts. They could not verify the assets, liabilities, income and expenses related to the company.

Morison also highlighted the company’s ongoing losses and high debt which raised going-concern issues for the Practice Note 17 company which has yet to come up with a regularisation plan. It has applied for a second time extension to submit its regularisation plan which was due on Sept 23, 2025.

The auditors said the group, which has been making losses for the past three financial years, made a net loss of RM57.2 million at the group level and RM1.45 million at the company level. Total loans and payables exceeded RM45 million.

Trading of the company’s shares was suspended for a day on Wednesday, after it failed to submit its delayed FY2025 annual report by Tuesday.

Trading will resume on Thursday.

In June, Bursa reprimanded the company and fined five of its directors a total of RM350,000 for failing to promptly disclose that the company had minimal business activity.

In September, Meridian bagged a RM40.5 million contract for a civil servant housing project in Kuala Muda, Kedah, from Kejora Harta Bhd.

The stock last traded at 2.5 sen, valuing the company at RM5.9 million. The stock has fallen 72.22% year to date.

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