Welli Multi asked to hold off release of accounts

PETALING JAYA: The Securities Commission (SC) has told Welli Multi Corp Bhd to withhold issuing its financial accounts amid doubts over the authenticity of its large receivables.
In a statement to Bursa Malaysia, Welli Multi said the SC had received information on the “authenticity” and “recoverability” of RM113mil of the company's total trade receivables of RM135mil at Dec 31, 2005.
It said the SC was of the opinion the information would have an impact on the price of the Welli Multi securities, leading to the commission's directive.
New chief executive officer Dr Abdul Rashid Tang Abdullah, however, told StarBiz the firm was confident of recovering the receivables by March. “We will take legal action, if necessary, to recover the receivables owed to us,” he said.
According to Abdul Rashid, the receivables had accumulated since 2004.
The release of Welli Multi's quarterly accounts for periods ending Dec 31, 2006 and March 31 is way overdue. Abdul Rashid said an office fire last year had destroyed many documents, causing the delay.
The food maker has only issued its financial results for the quarter ended Sept 30, 2006.
For the nine months to Sept 30, 2006, Welli Multi posted a lower net profit of RM2.34mil against RM3.07mil a year earlier despite a 13% rise in revenue to RM473mil.
In a separate filing, the company said Tan Kim Oh, Yoon Kok Chuan and Ke-Zan Nominees (Tempatan) Sdn Bhd, having a combined 10.17% stake in Welli Multi, had asked for the removal of Messrs Deloitte KassimChan as auditors. The firm is to be replaced by Messrs Moore Stephens for the period ended March 31, 2007.
Welli Multi shares jumped to RM3.32 late last month from a low of 84 sen on April 19. The stock was down nine sen at RM1.48 yesterday.
In the past few months, Welli Multi has seen massive changes to its board (including the CEO), audit committee and company secretary. Former CEO Tan Chin Han resigned on May 24.