Does Acra’s action against Miyoshi’s CEO signal a more proactive stance by the corporate regulator? - The Business Times
The company’s failure to recognise a large impairment loss came to light following a review under the financial reporting and surveillance programme
While scrolling through some local business news headlines earlier this month, I stumbled upon a report about the chief executive of Miyoshi having been fined S$22,400 by the state court after the company failed to recognise an impairment loss in its financial statements for the year to Aug 31, 2019.
This wasn’t a company that would ordinarily interest me – it’s a struggling metal components maker with a market capitalisation of less than S$5 million.
Yet, as my eyes glazed over and I started to scroll away, I noticed an interesting detail in the story: the problem came to light after the company’s financial statements were reviewed by the Accounting and Corporate Regulatory Authority (Acra) under its Financial Reporting and Surveillance Programme (FRSP).
Acra said in a press release dated Jan 10 that Miyoshi should have recognised an impairment loss of S$16 million on its equity investment in a foreign company called Core Power (Fujian) New Energy Automobile.
An independent valuer had determined that significant impairment had occurred, Acra said. “Despite this, Miyoshi failed to recognise the S$16 million impairment loss on the investment and overstated the value of its net assets by the same amount. This resulted in Miyoshi group’s FY2019 financial statements being materially misstated, providing an inaccurate picture of Miyoshi’s financial health,” the regulator added.
Copyright SPH Media. All rights reserved.
