UHY appointed as Ivory Properties' auditor following KPMG's resignation

• The former auditor highlighted that the company recorded a net loss of RM79.51 million for the financial year ended March 31, 2022 (FY2022), while liabilities exceeded current assets by RM60.22 million.
• Cash and bank balances amounted to RM1.67 million, with negative operating cash flow of RM8.9 million in FY2022.

KUALA LUMPUR (Feb 9): Penang-based property developer Ivory Properties Group Bhd has appointed Messrs UHY as the company’s new auditor following the resignation of Messrs KPMG PLT.

In a Bursa Malaysia filing on Thursday (Feb 9), the Practice Note 17 (PN17) company said it had received UHY's letter of consent dated Jan 25 to act as the company's auditor.

KPMG, had in August 2022, pointed out material uncertainties regarding the company's ability to continue as a going concern.

The former auditor highlighted that the company recorded a net loss of RM79.51 million for the financial year ended March 31, 2022 (FY2022), while liabilities exceeded current assets by RM60.22 million. Cash and bank balances amounted to RM1.67 million, with negative operating cash flow of RM8.9 million in FY2022.

In addition, KPMG said Ivory Properties had experienced difficulties in raising funds for its project developments and property acquisitions, termination of certain agreements and forfeiture of deposits. It also failed to repay interest and principal payments totalling RM1.98 million for certain loans and borrowings, of which the outstanding amount totalled RM49.73 million.

Ivory Properties, the first property company to slip into PN17 status since the Covid-19 outbreak, is required to submit a restructuring plan to the authorities by end-July 2023.

The company has been incurring losses since FY2020. For the six-month period ended Sept 30, 2022, the company widened its net loss to RM49.58 million from RM27.5 million in the same period the prior year, due to the write-off of certain inventories, although revenue increased to RM9.04 million from RM4.86 million, driven by the construction division.

Last October, Datuk H'ng Choon Seng, who is also the managing director of Heng Huat Resources Group Bhd, ceased to be a substantial shareholder of Ivory Properties. This came after H'ng sold 80 million shares through an off-market transaction, representing a 16.32% stake in the company.

NLY Development Sdn Bhd emerged as the second-largest shareholder of Ivory Properties with a 19.08% stake after it purchased 80 million shares or a 16.32% stake, via an off-market transaction.

Ivory Properties’ single largest shareholder is founder and CEO Low Eng Hock, who owns a direct stake of 27.25% and an indirect stake of  5.76%.

Having fallen 22% year to date, the stock closed unchanged at seven sen on Thursday, with a market capitalisation of RM34.31 million.