Asia Media expects legal advisers to take 3-4 months to probe RM103m losses

TheEdge Tue, Jan 19, 2021 07:43pm - 3 years View Original


KUALA LUMPUR (Jan 19): Asia Media Group Bhd expects its newly-appointed legal advisers and other professionals to take three to four months to complete investigations linked to losses in the group.

The group said in response to queries from Bursa Malaysia on its announcement dated Jan 15 relating to the appointment of the legal firm of Krish Maniam & Co to investigate “the possibility of losses caused by certain individuals with decision-making powers, prior to the present board of directors’ entry”.

According to Asia Media, the inspection is essentially linked to the write-downs and depreciation of the group’s assets and its whereabouts, that directly or indirectly led to the current impairment and write-downs.

Asked by Bursa to quantify the write-downs and depreciation amount,  Asia Media said: “Our initial estimated losses are to the tune of RM103,198,076.00 in impairment losses.”

Asia Media said it was suspicious, based on a plant, property and equipment (PPE) analysis concerning its transit TV system (TVS) and broadcast system and SMS gateway (BC).

In the analysis, it was noted that the TVS and BC accounted for RM173 million or 98% of the group’s total PPE cost for the financial years 2010 to 2018 (FY10 to FY18).

Asia Media noted that the PPE accumulations through capital works in progress additions started in 2010 to 2017, and in total stand at RM151 million.

The opening balance for the PPE in 2017 was not the same as the closing balance present in 2016, it added.

Additionally, deprecation rates for the TVS were revised to 33%, from 10% in 2014, resulting in the asset being fully depreciated within three years in 2017. Meanwhile, the depreciation rates for the BC were changed to 20%, from 10% in 2016, said Asia Media.

“At the end of year 2018, net book values of all PPEs were RM0. This was caused from an impairment of RM103 million, disposals and write-offs of RM9 million and accumulated depreciation of RM70 million,” Asia Media added.

The latest announcement comes after three shareholders, Chow Zee Neng, Sim Ah Yoke and Datuk Chu Boon Tiong, who collectively own at least 10% of the company's shares, wrote to the board of Asia Media to give notice of their intention to move resolutions to effect proposed board changes at an extraordinary general meeting (EGM) on Feb 18.

They are seeking to remove existing directors Datuk Prof Raja Munir Shah Raja Mustapha, Yap Ping Tiong, Datuk Kang Hua Keong, and Chua Yeong Lin, and replace them with Chu, Matthew Chan, Tan Vei Teck and Loi Chee Fong.

Shares in Asia Media finished one sen or 6.06% higher at 17.5 sen today, valuing the group at RM41.91 million.

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