Ying Li flags potential discrepancies in financial statements

YING Li International Real Estate has been given a further extension of time by the Singapore Exchange to report its Q2 results due to potential discrepancies in its financial statements found by its new finance team.

The new deadline is Nov 14.

The potential discrepancies could result in a decrease of up to about 30 per cent of the consolidated net tangible assets (NTA) of the group, based on its audited consolidated NTA for the year ended Dec 31, 2018.

The company is currently working with “an internationally recognised and reputable accounting firm” to conduct an independent check and special standalone review of the potential discrepancies relating to its China subsidiaries.

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It has also appointed Singapore and Chinese legal counsels to advise the board on possible legal implications arising from the potential discrepancies.

Ying Li International, a property developer, was the subject of a general offer by a unit of China Everbright earlier this year. The resultant shareholding of the offeror and concert parties stood at 72.04 per cent as at the close of the offer.

The China Everbright unit, State Alpha, has a 44.01 per cent stake in Ying Li International.

Following the close of the mandatory unconditional cash offer in May, the group saw changes in the management team of the company and its subsidiaries.

On Sept 6, the group announced that its group chief financial officer (CFO), Lim Gee Kiat, had quit to “pursue personal career aspirations”.

The CFO’s departure came three months after Ying Li’s executive chairman and group chief executive officer, Fang Ming, resigned. The 69-year-old left the company in June due to health issues.

A new finance team was formed in view of the changes. The team was faced with the “challenging” task of taking over the voluminous documents mostly detailing the financials of the group’s projects in Chongqing, said Ying Li International.

Some staff from the finance and operation departments in China had left and the new finance team had to spend time locating physical files and documents, the group added.

While the work by the new team has been substantially completed, it needed additional time to ensure the veracity of financial information to be included in the results for the second quarter ended June 30, 2019, said the group.

Ying Li International is making a request to lift the trading halt in its shares. Trading of the group’s shares was halted from Sept 11 pending this announcement.

Ying Li shares last closed at 11.6 Singapore cents on Tuesday, down 0.4 cent or 3.33 per cent.

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