Friday, November 25, 2011

Sersol detects embezzlement in Zhuhai associate

KUALA LUMPUR (Nov 25): SERSOL TECHNOLOGIES BHD [] has detected embezzlement in its 50% owned associate Zhuhai MS Coating Ltd (ZMCL) and the losses are estimated to be 1.756 million renminbi (RM874,000).

The ACE-listed company said on Friday that it had in September detected discrepancies in the bank accounts of ZMCL and found that cash embezzlement had occurred in ZMCL.

'The embezzlement was committed by a former employee of ZMCL who has been detained by the Police Investigative Bureau of Zhuhai, China since Oct 3, 2011 for questioning and to facilitate their investigation,' it said.

Sersol said the authorities have yet to complete their probe. However, the company carried out an internal probe and also engaged a Chinese CPA firm, Da Hua Certified Public Accountants China to conduct an independent investigation.

It said the embezzlement started during the financial year ended (FYE) Dec 31, 2009. It was committed through fraudulent withdrawals from ZMCL's bank accounts, namely the main bank account maintained with Bank of CONSTRUCTION [], China.

'The former employee was able to conceal the fraud from detection by management and ZMCL's auditors over a prolonged period through a combination of using fictitious bank statements and other banking and accounting related documents.

'Sersol's internal investigation estimated the losses to be 1.756 million renminbi (RM874,000) whilst the findings of the independent review performed by the Chinese CPA firm estimated the losses to be 1.727 million renminbi.

It said that it had yet to determine the quantum of losses sustained in each respective financial years/period arising from the embezzlement.

'Taking into consideration the minority interests, the estimated losses attributable to the shareholders of Sersol is RM437,000,' it said.

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