Raffles Infrastructure: Special audit delayed by lack of effective cooperation from China subsidiary

China yuan coins

Raffles Infrastructure said late on Friday that it hasn’t yet completed the special audit required by SGX as a condition for its shares to resume trading as its China subsidiary, Sinwa Knitting & Dyeing, didn’t give the audit team effective cooperation.

KPMG Services, which the company appointed in December 2017 to conduct the special audit, traveled to Quanzhou, China, on 21 October for the fieldwork, Raffles Infrastructure said in a filing to SGX.

“When the KPMG team arrived at Quanzhou, they were not afforded effective cooperation by the China subsidiary. Mr. Wu was away during the time and his personal assistant, a Mr. Zhang, was not able to facilitate the team,” Raffles Infrastructure said.

“In view of the lack of cooperation by the China subsidiary, the company is working closely with its appointed professionals to ensure that the special audit is completed on time, and all outstanding issues are resolved effectively with the assistance of these professionals,” it added.

Raffles Infrastructure noted that the KPMG team was given a tour of the production facilities and it observed that production was ongoing, with 20 to 30 staff working.

Prior to the trip, KPMG had sent Raffles Infrastructure a list of required information about the China subsidiary and the company told the team it could begin the fieldwork, the filing said.

The special audit was set to focus on transactions with and net compensation claims paid to three customers: ShiShi City Ai Li Nu Clothing, JinJiang City Bin Lang Apparel Manufacturing and ShiShi City Jin Tai Wu Textile Clothing, it said. The amounts involved were 132.26 million yuan, 205.35 million yuan and 466.0 million yuan, respectively, it said.

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