PwC review of SBI Offshore's deals casts spotlight on 2 ex-CEOs

THE findings of a review into the past transactions by SBI Offshore (SBIO) involving an associate company could well shake things up at the beleaguered offshore-and-marine firm.

The company called a trading halt on Friday, pending an announcement, following a report by The Business Times on a tussle between the company's founder and its chief executive over a yet-to-be-released report by Pricewaterhouse Coopers (PwC).

The counter was last traded at 15 Singapore cents.

SBIO founder and majority owner Tan Woo Thian has called for an extraordinary general meeting (EOGM) together with several other shareholders, to remove CEO Chan Lai Thong.

Mr Chan was the firm's chairman until March this year, when he became CEO, succeeding Mr Tan who had stepped down.

Those who are requisitioning the EOGM are also seeking to appoint four directors; among the four is Mr Tan's business partner and SBIO's former chairman and CEO Hui Choon Ho, who is also a major shareholder of the firm.

But things could get a little delicate for Mr Tan and Mr Hui, whose names crop up several times in the PwC report.

SBIO's audit and risk management committee had commissioned the report in July, following a number of troubling deals involving an associate company.

BT reported on Friday that the PwC report - so far, there has been neither word about its release nor a statement by SBIO - has unearthed two sets of conflicting agreements on the purchase and subsequent sale of China-incorporated company Jiangyin Neptune Marine Appliance Co (NPT).

Depending on which agreement is deemed valid, the two sets of documents raise the possibility of breaches in the rules binding Singapore's securities, SGX and Catalist listings - and even China's tax laws, said the PwC report.

Based on a disclosure in the company's prospectus for its 2009 Catalist listing, SBIO said it acquired a 35 per cent stake in NPT on March 3, 2009 for US$1.75 million.

The first of the two agreements PwC found for this transaction stated the purchase price as US$1.75 million; the document was undated, save for the year 2008 below the signature block.

The other agreement, dated Oct 20, 2008, stated a purchase price of merely US$350,000.

The first agreement was signed by Mr Hui on behalf of the firm, while the second was signed by both Mr Hui and Mr Tan, said the PwC report.

Similarly, in relation to the sale of NPT for US$3.5 million in August 2015 - a development announced by SBIO - there was a second agreement dated Dec 8 that year, stating the disposal price as US$1.75 million. This second document bore Mr Tan's signature.

The existence of two sets of agreements on the purchase and sale of NPT "raises serious concern" on which one is valid, said PwC, which has recommended that the board seek legal advice to review its findings.

This article was first published on Sept 10, 2016.
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