SINGAPORE (Oct 5): USP Group, whose ability to remain as an ongoing business has been cast into doubt by auditors, said it was served with a statutory demand on Friday by Legal Standard LLP, solicitors acting for a certain Ridwan Kasenda.
The statutory demand is for payment of the sum of $250,273.97 which is alleged to be outstanding as of Friday. This is in relation to a settlement agreement which was entered into on or around June 27 between USP and Ridwan.
The statutory demand states that if USP fails to pay the outstanding sum within three weeks from Friday, the plaintiff will apply to the High Court for a winding-up order to be made against the company on the ground provided for in the Companies Act.
In its Sunday filing, USP Group says it intends to seek legal advice in relation to the statutory demand.
Last month, independent auditors RSM Chio Lim cast doubt on USP’s ability to continue as a going concern after highlighting an emphasis of matter on a material uncertainty in the group's FY19 financial results.
See: Board says USP Group can continue as going concern, despite auditors' red flags
However, the trader of oil and marine equipment and property developer insisted it was able to continue as a going concern despite the misgivings of the auditors as as it is in the process of disposing its subsidiary, Biofuel Research, for a cash consideration of $5.6 million.
Furthermore, the group said it had obtained written confirmations from its bank on June 27, to which the latter has agreed to accommodate the breach of loan covenants on a one-off basis for FY19.
In 1Q20 ended June, USP reported a loss of $634,000, compared to earnings of $149,000 in 1Q19, while revenue for the period fell 6% to $9.1 million.
Shares in USP last traded at 3.5 cents on Sept 30.
