CATEGORY: NEWS AND ANNOUNCEMENTS, PRESS RELEASES
ACRA will act against non-compliance with accounting standards to maintain confidence in the credibility of financial reporting in Singapore
Singapore, 10 January 2025 – The State Court has fined Sin Kwong Wah Andrew, an executive director and the chief executive officer of Miyoshi Limited (“Miyoshi”), an SGX listed company, a total sum of $22,400 in relation to Miyoshi’s failure to recognise a $16 million impairment loss in its financial statements for financial year ending 31 August 2019.
2 Miyoshi’s audited financial statements were selected for review by ACRA under the Financial Reporting and Surveillance Programme, where ACRA reviews selected financial statements filed with ACRA to check for compliance with the accounting standards. The non-compliance was uncovered in the course of the review.
3 The $16 million impairment loss arose from a decline in the value of the company’s equity investment in a foreign company, Core Power (Fujian) New Energy Automobile Co. Ltd. Miyoshi had engaged an independent valuer to assess if the equity investment was impaired. The independent valuer’s draft report, which was later finalised by the independent valuer, with no material changes, showed that a significant impairment had occurred. Despite this, Miyoshi failed to recognise the $16 million impairment loss on the investment and overstated the value of its net assets by the same amount. This resulted in Miyoshi Group’s FY2019 Financial Statements being materially misstated, providing an inaccurate picture of Miyoshi’s financial health. Had Miyoshi recognised the $16 million impairment loss in its FY2019 Financial Statements, the Miyoshi Group’s loss before income tax would have increased by more than 30 times to $16.78 million and its total assets would have reduced by 19% to about $67.9 million.
4 Directors have a fundamental duty to provide accurate and reliable financial information. Providing investors with reliable and meaningful financial information for decision-making will bolster investors' and other stakeholders' confidence in the transparency, integrity, and quality of financial reporting in Singapore.
5 ACRA will not hesitate to take action against non-compliance with accounting standards. This is to maintain confidence in the credibility and reliability of financial reporting in Singapore. Failure to comply with section 201(5) of the Companies Act currently carries a penalty of up to $250,000. For offences committed on or before 30 June 2023, the penalty for the offence is a fine of up to $50,000.
2025/01/10
