KUALA LUMPUR: Bina Goodyear Bhd has suspended its senior finance general manager following the financial irregularities in a RM29.6 million provision of unbillable work in progress brought to light by the company.
Bina Goodyear’s case adds to the growing list of financial irregularities occurring on the local corporate scene this year, with Patimas Computers Bhd and Silver Bird Group Bhd among them.
“Further to the announcement made on Nov 19, the board of directors wishes to announce that the senior general manager (finance) has been suspended, pending investigation into the accounting records of the company,” Bina Goodyear said in a statement to Bursa Malaysia.
On Monday, the construction outfit slipped into PN17 status as the shareholders’ equity diminished to a level of 25% or less of the issued and paid-up capital, triggered by the RM29.6 million provision for unbillable work in progress.
“Approximately RM29.6 million of the work in progress is not billable and chargeable to customers, and the group would need to make a provision for this amount,” the company said in the statement.
This led to the company appointing PKF Advisory Sdn Bhd to conduct a special audit to determine the effect of the provisions on its financial position.
Following the announcement, Bina Goodyear’s share price plunged 56.25% to a five-year low of 18 sen on Monday. During the five-year period, the shares have been trading between RM1.29 and 18 sen.
The company has been plagued by a string of losses since 2009. For the financial year ended June 30 (FY12), the company’s net loss ballooned to RM38.58 million, 99.6% more than the net loss in FY11.
The financial statements for FY12 revealed that it had short- and long-term borrowings of RM16.06 million and an overdraft of RM4.52 million, while its cash flow position was in the red at RM1.61 million.
Just last month, the company proposed a debt settlement through cash and shares to its scheme creditors. However, the debt settlement is pending the approval of Bursa Malaysia and the shareholders. It owes its scheme creditors some RM38.05 million.
Bersatu Jayamaju Sdn Bhd is the company’s largest shareholder with a 24.57% interest. Other substantial shareholders are Casa Inai Sdn Bhd, with 6.47%, and Edmond Hoyt Yung has 6.37%.
Yesterday, Bina Goodyear closed at 18.5 sen, down 2.63% from the previous day.
This article first appeared in The Edge Financial Daily, on Nov 23, 2012.
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