Raffles Education Corporation (REC), on Oct 21, announced that it was asked by the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) to provide documents in relation to the loan facilities extended by Affin Bank Berhad to REC’s subsidiaries Raffles K12 Sdn Bhd and Raffles Iskandar Sdn Bhd on Oct 19.
According to the company, the request from MAS and CAD was connected to an investigation into a potential offence under the Securities and Futures Act (SFA).
On Oct 19, six of Raffles Education’s directors were interviewed by the authorities in relation to the investigations.
The directors – Chew Hua Seng, Lim How Teck, Joseph He Jun, Ng Kwan Meng, Gan Hui Tin and Doris Chung Gim Lian – have surrendered their passports, and none of them have been arrested, charged, or placed on bail.
Chew is the company’s chairman and CEO, while Lim is its lead independent non-executive director. Joseph He Jun is its non-independent non-executive director, Ng and Gan are independent non-executive directors, while Chung is a director and part of the key management team of Raffles K12 and Raffles Iskandar.
The individuals were said to have cooperated with the authorities on the investigations.
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In the interim, they will continue to serve in their roles as directors and, or executive officers of the company, as the company believes that the investigations will not “compromise the ability” of the directors to carry out their duties.
Raffles Education, on July 29, announced that Raffles K12 and Raffles Iskandar had been served writs and statements of claim filed by Affin Bank in the High Court of Malaysia.
The writs were served by Affin Bank nearly two months prior on May 27.
The writs relate to certain alleged non-repayments under the facility agreements dated July 21, 2016 and Feb 14, 2017.
Following the writs, Affin Bank has sought an immediate repayment of the outstanding amounts totalling to some RM410 million ($132.3 million).
According to Raffles Education in July, the company has “reached a settlement” with Affin Bank on the “amicable resolution” of the matters.
Response to letter
Separately, Raffles Education has issued a response to a letter issued by Singapore tycoon Oei Hong Leong who made several allegations against the company.
In Oei’s letter dated Oct 16, he alleged that Chew has “caused the company to hire all his adult members of his family at high salaries”. In addition, it was stated that there were “unofficial” family members of Chew’s who may be hired by the company at “high salaries”.
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Further allegations include Chew paying himself a salary of $5 million which includes bonuses and profit-sharing, Chung receiving a salary of “almost $500,000”, as well as Chew receiving “perks” such as wine, gifts and family holidays that were fully paid by the company in the name of “company business”.
In its response on Oct 21, Raffles Education denied the claims, saying the allegations were made “without evidence”, calling them “baseless and misleading”.
“In particular, the company questions the grossly inflated and inaccurate figures in the 16 October Letter, which was issued one day after the company uploaded the Audited S164A Statement and its annual report and other relevant disclosures on Oct 15,” reads the statement put out by the company.
In addition, Raffles Education had written to Oei to request for an explanation pertaining to the allegations, or retract them.
It pointed out that the directors’ remunerations were recently audited by an auditor of the company, where Chew was paid $2.89 million, while Chung received $372,240.
Oei’s letter was said to have caused shares in Raffles Education to plunge 2.1 cents or 26% to close at 6.1 cents on Oct 18.
The “unusual volume movements” caused market regulator Singapore Exchange Regulation (SGX RegCo) to issue a query to the company.
This may have been caused by the sale of sales conducted by Oei on Oct 19.
According to Raffles Education's statement, Oei sold some 38.93 million shares through open-market sales on Oct 18, which accounted for 74.38% of the total number of 52.34 million shares that were publicly traded on that day.
Shares in Raffles Education closed at 6.1 cents on Oct 18. Trading in the company’s shares has been halted following a request before market open on Oct 19.
Photo: Raffles Education
