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Universal Resource and Services files police report following special audit

The Edge Singapore
The Edge Singapore • 3 min read
Universal Resource and Services files police report following special audit
The company is engaging legal help to see if there’s any civil action that can be taken against all wrongdoers indicated so in the special audit.
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SINGAPORE (May 19): The board of Universal Resource and Services had filed a report with the Commercial Affairs Department, following the release of a special audit which suggested that insiders of the company were in a “scheme of deceit”.

The company had similarly submitted the same special audit to the Accounting and Corporate Regulatory Authority, flagging that “certain offences may have been committed”.

In addition, the company had engaged legal help to see if there’s any civil action that can be taken against all wrongdoers indicated so in the special audit.

The company, formerly known as Sky China Petroleum Services until a name change in April 2013, has been suspended from trading since Feb 2017 and the special audit commissioned.

According to the special audit released on May 18, internal controls at Universal Resource and Services had failed, leading to discrepancies in its financial records over a significant period.

SGX RegCo, commenting on the findings of the special audit, noted that on top of multiple false disclosure to the investment public, a “systematic scheme of deceit” might have been “perpetrated within.”

The special audit was called to review the irregularities in the cash and bank balances of the company’s subsidiary in China, SKY Petroleum Technology Development (Tianjin) Co (SKY Tianjin).

The special auditors were not able to contact former CEO Liu Qing Zeng (seen here in a 2009 picture). Liu, who stepped down in April 27 2015, was purportedly behind a series of deals made by the company.

Neither was Stephen Moore LLP, the special auditor, able to contact two key former finance personnel based in China, Li Xiaoyun and Guo Zengsheng, because of their “sudden disappearance” in Feb 2017, upon commencement of the audit.

According to the special audit, there were material discrepancies between SKY Tianjin’s bank statements based on its records maintained in Singapore, and its bank statements extracted from the relevant banks in the PRC.

For example, the bank statements did not reflect the use of funds to pay for three acquisitions undertaken by SKY Tianjin, as announced by the company on June 20 2014, Jan 12 2015 and Aug 31 2015, thereby, suggesting that these deals were either fake or not properly accounted.

Also, Universal Resource and Services did not disclose that SKY Tianjin had pledged RMB310 million and RMB90 million of fixed deposits held in Ping An Bank, to be used as security for loans taken by the company’s former 46.55% indirectly-owned subsidiary, Wenling Xinghai Ocean Shipping Co.

SGX RegCo notes that the company did not have a robust and effective system of internal controls in respect of the custody and application of its common seal, legal representative seals and finance seals.

“The special audit report suggests several potentially serious breaches of our Listing Rules, and perhaps even the law,” said SGX RegCo, adding that it will be reviewing the special audit “very carefully” and if need be, refer the matter to the relevant authorities.

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