Tanjung Offshore Bhd (TOB) will lodge official complaints to the Malaysian Anti-Corruption Commission (MACC) on its Gas Generators (M) Sdn Bhd (Gastec) deal and UK property transaction.
This latest statement to Bursa Malaysia contrasted with TOB’s January announcement that said an independent committee had found no improprieties or discrepancies on those two deals – the RM34.3mil acquisition of the remaining 49% stake in gas generator manufacturer Gastec (contract signed in October 2013) and £6.7mil (RM38.2mil) acquisition of Wavenet Investments Ltd (UK) that owns an eight-story building in Birmingham, England (deal signed in March 2014).
The announcement on Friday followed the completion of special audit report by Ferrier Hodgson MH Sdn Bhd and the formation of a special task force board committee to review the report and give recommendations to the board.
In the latest filing with the exchange, the oil and gas service provider said it would engage external lawyers to review the terminated reverse takeover of the company by Paris-based Bourbon SA pursuant to special auditor Ferrier Hodgson’s recommendations, as well as to review the ethylene propylene diene monomec (EPDM) project in China and the failed chromite project in the Philippines.
It will then consult their legal professional views on grounds of wrongdoing, if any.
On the construction work request (CWR) closure project worth about RM250mil, TOB said that pursuant to the report and an announcement dated May 29, no further action was required.
For the acquisition of the UK property in March last year for £6.7mil (RM38.2mil) with refurbishment cost of £4.8mil (RM27.4mil), the company said it was in the midst of appointing a real estate agent and valuer in the UK to conduct a proper valuation on the UK property.
Last week TOB announced that Ferrier Hodgson was of the view that there did not appear to be any conflict of interest or related breach of duty with respect to executive deputy chairman Tan Sri Tan Kean Soon and former director Muhammad Sabri Ab Ghani.
In a Bursa announcement on Jan 28, TOB said an independent committee set up on Jan 8 for internal review found that the company had complied with Bursa Malaysia listing requirements with regard to the UK property acquisition.
However, in the latest announcement, the company said there appeared to be no physical work on site although the company embarked on a £4.8mil (RM27.4mil) refurbishment.
The previous independent committee also found that the pricing and acquisition of the remaining 49% in Gastec was “fair and reasonable” and no improprieties or discrepancies were found with regard to it.
Moreover, it discovered no basis for anonymous allegations that the Bourbon transaction was delayed or terminated due to the Gastec’s acquisition and/or overvaluation based on a purported valuation by Ernst & Young, which never performed any valuation on Gastec.
The committee, however, found “deficiencies in process” in the Philippine operations, “lapses in internal controls” for the EPDM project, and “elements of collusion/collaboration” that could lead to “serious inflation of costs for Tanjung” in the CWR closure project.
The independent committee’s report led to the company lodging a police report against Tan and Sabri, who were suspended from their executive positions.
Meanwhile, in a press statement issued on Friday, TOB’s board of directors vowed to clean up the weaknesses identified by a forensic audit and said it had accepted the recommendations made by the special task force that was formed to study the next course of action. (See “Tanjung Offshore vows to clean up weaknesses”)
Tanjung Offshore closed unchanged on Friday at 45 sen. – The Star