TEE Intl: Auditors cite material uncertainties over going concern

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TEE International‘s auditors have issued a disclaimer of opinion on the company’s financial statements for the 16-month period ended 30 September 2021, and cited material uncertainties over its ability to continue as a going concern, according to a filing to SGX Thursday. 

Foo Kon Tan LLP, the independent auditor, said the disclaimer of opinion was in part due to the lack of updates from the Commercial Affairs Department (CAD) of the Singapore Police Force which could provide new information or findings to resolve the disclaimer of opinion on its report for the financial year ended 31 May 2020. 

In the fiscal 2020 report, S$6.55 million of unauthorised remittances were cited over the previous year, which were repaid over two financial years, the auditor said.

The auditors also pointed to material uncertainties which may cast “significant doubt” over TEE International’s ability to continue as a going concern. 

The group’s total liabilities exceed total assets by S$181.28 million as of end-September, and the company defaulted on a loan repayment in 2021, with the bank exercising its rights to take possession of the mortgaged property at 33 Changi North Crescent in Singapore, the report said. 

“The group’s and the company’s ability to continue as going concerns is dependent mainly on the successful implementation of the restructuring plan, the ability to secure financing as and when required, the profitability of future operations, and the continuing support of banks, suppliers, and other parties, and/or an injection of capital by a white knight,” the auditor said.

“Given the multiple uncertainties above, we are not able to determine if the going concern basis of preparation of these financial statements is appropriate,” the auditor added. 

TEE International continues to face contingent liabilities over claims against the engineering and construction segment for liquidated damages, defects and/or under guarantees for contract performance, the report said. 

“The outcome of the claims and counterclaims cannot be determined with reasonable certainty,” the auditor said.

TEE International will also need to revise its fiscal 2020 financial statements due to non-compliance with accounting standards, including the classification of some proceeds from the sale of shares in Chewathai PCL, recognition of revenue from the sale of shop lot units and how TEE Land was accounted for prior to its sale, the auditor’s report said.

Read the filing to SGX