What is Scomi Energy Services investigating regarding its holding company?

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Scomi Energy Services Investigates RM64.33 Million in Advances to Holding Company

Scomi Energy Services Bhd (SESB) is conducting an investigation into advances totalling RM64.33 million that were made to its immediate holding company, Scomi Group Bhd, and its subsidiaries. These transactions occurred over a two-year period between June 2016 and June 2018. The board was informed in May 2018 that these advances were made without prior board authorisation, prompting an immediate investigation.
Advances Made Without Board Approval

The advances in question, amounting to RM64.33 million, were disbursed to Scomi Group and its associated entities between June 2016 and June 2018. The board of SESB became aware in May 2018 that these significant financial movements had not received the necessary prior approval from the board. This lack of authorisation triggered the commencement of an internal investigation to ascertain the details surrounding these transactions.
Engagement of External Reviewers

Following the discovery of the unauthorised advances, SESB engaged a legal firm to conduct a comprehensive review of the involved transactions. This legal review culminated in a preliminary report being issued in November of the previous year. Subsequently, to further scrutinise the matter and its implications, SESB has appointed an independent audit firm to undertake an investigative review. This audit aims to thoroughly examine the issues and potential risks that have arisen as a consequence of these advances.
Remedial Actions and Corporate Governance Enhancements

In response to the findings and ongoing investigation, SESB's board has initiated several improvement and remedial actions to strengthen corporate governance. These measures include a review of the company's management structure and the termination of shared services arrangements with Scomi Group, with the exception of essential functions. Furthermore, the company is revising its reporting and escalation processes, ensuring that the Chief Financial Officer (CFO) is directly accountable to the board for reporting all material matters, particularly related party transactions. Scomi Group holds a 65.64% stake in SESB, making it the controlling shareholder.

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What is Scomi Energy Services investigating regarding its holding company?

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