Ivory Properties' auditor flags group's ability to operate as going concern

• The auditor said it was also unable to obtain sufficient audit evidence in relation to Ivory Properties' plan to source for an interested party to dispose of a parcel of land held for future development.

KUALA LUMPUR (July 28): Ivory Properties Group Bhd's external auditor Messrs UHY has flagged a material uncertainty that may cast significant doubt on the Penang-based property developer’s ability to continue as a going concern.

In a bourse filing on Friday (July 28), Ivory Properties said UHY had expressed a disclaimer of opinion on the group's audited financial statements for the financial year ended March 31, 2023 (FY2023).

UHY noted that the group incurred a net loss of RM125.66 million for FY2023 and its current liabilities exceeded its current assets by RM135.61 million as at end-March. It also noted that the group had cash and bank balances of RM1.87 million.

UHY also said as at end-June, Ivory Properties had defaulted in interest and principal repayments amounting to RM1.91 million in connection to the outstanding borrowings of RM78.45 million.

The auditor said it was also unable to obtain sufficient audit evidence in relation to Ivory Properties' plan to source for an interested party to dispose of a parcel of land held for future development. "As of the date of this report (July 26), no formal agreement has been entered into with any party for the disposal of the aforesaid land."

In July 2022, Ivory Properties  slipped into Practice Note 17 status and has 12 months from July 29, 2022 to submit a proposed regularisation plan to Bursa Securities or the Securities Commission Malaysia. However, the group had on July 27 applied to Bursa Securities to extend the deadline by another 12 months until July 28, 2024.

Ivory Properties shares closed down one sen or 14.29% at six sen on Friday, giving it a market capitalisation of RM27.57 million.