Sushi restaurateur Sakae Holdings said on Friday that it would delay its annual general meeting to carry out a thorough investigation of a soured sugar transaction which left it with a doubtful debt after US$4.3 million worth of the sweet stuff went missing.
It’s a story of a missing customer, with no apparent place of business, and a deal broker who left no forwarding address.
The company’s subsidiary, Sakae Capital Pte. Ltd., or SCPL, had appointed a representative to conduct commodity trading and conducted four trades of under US$150,000 with the representative, which was authorized to find the buyer and seller of the commodity, Sakae said.
After the four transactions were successfully and profitably completed, the representative, which Sakae didn’t name, in July-August 2017 brought SCPL a 12,800 metric tonne sugar transaction, purportedly sold to two customers, which Sakae didn’t name, but labeled A and B.
Customer A took delivery of 3,457 metric tonnes of sugar and paid SCPL US$1.6 million in October 2017, it said. Customer B took delivery of 9,343 metric tonnes of sugar with a sale value of US$4.3 million, but did not pay, Sakae said, adding it made a full provision of doubtful debts in its unaudited financial statements released in late August.
Also in late August, Sakae’s auditors highlighted the transaction to the audit committee and the board of directors and performed background checks on Customer B to assess the collectability of the receivable as the transaction amount was substantial from a group perspective, it said. The audit committee then appointed an independent corporate governance and internal audit firm to review the transaction on 30 August, it said.
The preliminary findings, provided on Thursday, showed that the shareholders and directors of Customer B were uncontactable, while a visit to Customer B’s place of business showed that it was apparently not in business, the company said.
In addition, the independent internal auditor requested a meeting with the representative, who was uncontactable, and when the representative’s registered residential address was visited, the independent internal auditor was informed by the occupiers that no such person lives there, Sakae said.
“Accordingly, the audit committee and the board of directors has decided that as a matter of prudence and in the interest of ensuring that the financial statements would reflect accurately the company’s position, the originally intended date of the annual general meeting should be postponed for the company to carry out a complete and thorough investigation on the sugar transaction with Customer B and the relationship between the representative and Customer B,” Sakae said.
Sakae didn’t state if the missing sugar had been located.