YNH audit committee wants independent review of group’s JV, turnkey construction agreements

• YNH said SSF & Co’s report commented that an analysis was carried out on 17 agreements entered into by Kar Sin, and they “do not appear on the face of it to be scams as alleged in various reports found on Facebook or the internet”.

KUALA LUMPUR (Nov 7): YNH Property Bhd's three-member audit committee intends to appoint a professional firm for an independent review of the real estate developer’s joint venture (JV) and turnkey construction agreements.

This is in addition to a special review by two law firms — Samir Sumathi Fernando & Co (SSF & Co) and Benjamin Dawson (BD) — commissioned by the group’s management, according to YNH’s responses on Monday to Bursa Malaysia’s queries.

YNH said that since the management had appointed the law firms whose finding report found that "the qualified amount of the inventories in respect of the JV and turnkey contracts entered by the group with the respective JV parties or landowners is substantial at RM1.1 billion, the audit committee opined that it would be appropriate for the audit committee to appoint a professional firm for the independent review and report directly to them".

“The audit committee is in the midst of finalising the appointment of the professional firm and also their scope of works. An announcement on this development will be announced in due course,” said YNH.

Both BD and SSF & Co were appointed in April this year to provide legal opinion on whether the JV and turnkey construction agreements entered into between YNH’s wholly-owned unit Kar Sin Bhd and various landowners or counterparties are in compliance with laws and regulations in relation to related party transactions.

YNH said SSF & Co’s report commented that an analysis was carried out on 17 agreements entered into by Kar Sin, and they “do not appear on the face of it to be scams as alleged in various reports found on Facebook or the internet”.

Nonetheless, the report made clear that this is subject to further verification or validation. SSF & Co offered to be retained and to provide such additional services if needed.

Both SSF & Co and BD’s scope of work was completed in July this year, with YNH’s management requiring SSF & Co to perform additional works, including verification and validation of these agreements.

“This is a separate engagement, which started in August 2023, and is expected to complete at end-November 2023,” YNH told Bursa.

The special review was requested by YNH’s external auditor Messrs Baker Tilly Monteiro Heng PLT pertaining to the RM1.1 billion sum paid to JV parties or landowners for property development work.

As the special review by BD and SSF & Co was still ongoing at the latest financial year ended June 30, 2023 (FY2023), Baker Tilly could not obtain sufficient appropriate audit evidence in relation to this part of its external audit report, hence the auditor expressed a qualified opinion.

Apart from that, Baker Tilly said the rest of YNH's financial statements for FY2023 give a “true and fair” view of the group’s financial position.

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