SDAI : 5TI 0%, formerly known as Kitchen Culture, will seek further updates on payroll irregularities concerning two former employees, and reprimand its former interim chief executive for his role in an unauthorised transaction.

 

In a bourse filing on Wednesday (Nov 22), the company gave an update on the actions it will take in response to findings highlighted in an independent special audit report in July.

 

The audit found that the company&rsquo s board had in 2021 lodged a police report over suspected payroll irregularities. This concerned two former employees of its key subsidiary KHL Marketing Asia-Pacific, and involved a sum of around S$520,000.

 

The auditor said it was unable to independently verify whether the two former employees were meaningfully employed by the company during their period of employment.

 

In response, SDAI said it will write to BDO Advisory &ndash the liquidators of KHL Marketing &ndash to understand if they will take further steps on the matter, and if SDAI is entitled to monetary recovery as KHL Marketing&rsquo s shareholder and creditor.

 

If KHL Marketing contravened the Employment of Foreign Manpower Act as a result of the irregularities and is liable to be fined, SDAI also hopes to understand whether BDO will seek an indemnity from persons deemed responsible.

 

In the report, the auditor also uncovered a total of five agreements that the company&rsquo s former interim CEO Lincoln Teo Choong Han had executed, on behalf of the company&rsquo s wholly owned subsidiary KC Technologies, without obtaining approval from the board.

 

Under the agreements, KC Technologies and Sino Allied were jointly set up with a structured finance scheme for one year to support Amazon&rsquo s e-commerce merchants with their collective procurements, which was not in the group&rsquo s ordinary course of business, the auditor said.

 

SDAI said it will reprimand Teo for his role in the lapses in corporate governance for any and all claims that might be brought or threatened by any of the counterparties.

 

It will also ask for further information on whether there are other occasions where Teo entered into transactions on behalf of the company without full board approval.

 

The kitchen solutions company formerly known as Kitchen Culture adopted the counter name SDAI effective Wednesday, after it was approved at the company&rsquo s extraordinary general meeting held last Friday.

 

Trading of shares under its new counter name remains suspended.

 

The suspension had been in place since July 2021 due to a variety of issues, including non-compliance and systemic internal failures.

Kitchen Culture Holdings 5TI 0.00% , soon to be named SDAI Limited, has appointed Foo Kon Tan LLP as the new statutory auditor of the company following its extraordinary general meeting (EGM) on Nov 17.

 

According to the company, the appointment of Foo Kon Tan LLP as its new statutory auditor is a significant milestone accomplished by its board to rectify the company&rsquo s historical breaches,   and signifies a major step in working towards the resumption of trading of the company&rsquo s shares. 

 

Since July 21, 2021, the company&rsquo s shares have been suspended due to a variety of issues including non-compliance and systemic internal failures.  

 

Prior to this, the company had failed to secure a statutory auditor when the previous auditor, Nexia TS Public Accounting Corporation, now known as CLA Global Public Accounting Corporation, did not seek re-appointment at the company&rsquo s last annual general meeting (AGM) in March 2022 for its FY2021 ended June 2021.

 

Consequently, the company has failed to comply with the requisite listing rules of SGX and is in breach of statutory requirements under the Companies Act 1967 of Singapore for filing of statutory accounts and convening of shareholders&rsquo meeting. 

 

The company has also been working to accelerate the process of completing its independent special audit conducted by Deloitte and Touche Financial Advisory Services by the end of the year in compliance with statutory requirements, another key factor in the resumption of trading of the company&rsquo s shares.

 

Executive chairperson of the board Hao Dongting says: &ldquo Through the effective stewardship of the new board, a new statutory auditor of the company has now been appointed, filling the void following the cessation of the previous auditor. This is a significant and necessary step forward in getting the Company back on the path of accountability, restoration and fulfilling all its statutory responsibilities to shareholders.&rdquo

 

" With the new management in place, we are actively working to chart a new path for the company by pursuing various strategies going forward, including a new name for the company as a testament and reflection of the positive developments being undertaken in our new growth trajectory,&rdquo adds Hao.

 

At its EGM on Nov 17, a special resolution was also passed to change the company&rsquo s name to SDAI Limited.

 

According to the company, its name change will reflect its strategic direction and business activities going forward. &ldquo This will enable the company to create a new corporate identity for itself and develop a new positioning in the market, allowing the public and the company&rsquo s business partners to better identify with the company under this new name moving forward,&rdquo it says. 

 

The company says it will lodge the requisite statutory returns with the Accounting and Corporate Regulatory Authority of Singapore (ACRA) to effect the company&rsquo s name change.

 

Hao says: &ldquo Holding the EGM marks a vital milestone towards the board&rsquo s ultimate goal of obtaining SGX approval for the resumption of trading of the company&rsquo s shares. We would like to assure shareholders that we are steadily making progress to create long-term value for the company and we thank them for their continued trust and patience in us in overcoming the many obstacles during the tumultuous period of the company&rsquo s history.&rdquo

 

CATALIST-LISTED kitchen equipment supplier Kitchen Culture Holdings is partnering Ooway Technology to offer services including credit rating services and integrated supply chain finance solution for merchants operating in Hong Kong on e-commerce trade platform DHgate.com.

 

The services will be provided through DHgate.com' s financial solutions partner Camel Financial, said Kitchen Culture in a bourse filing on Wednesday.

 

Said Lim Wee Li, executive chairman and chief executive officer of Kitchen Culture, in a media statement: " China and the Asean region is poised to become the centre of the global digital supply chain and this is only possible with proper credit assessment, access to financing and capital resources within the supply chain.

 

" We hope to grow from strength to strength by capitalising on the synergies from all parties in this collaboration."

 

Ooway Technology, which runs an artificial intelligence (AI)-based credit management platform, had entered into a strategic cooperation agreement with Camel Financial to provide the firm with the technology to manage risk through a Behaviour Model of Association Risk System. The system will establish a correlation between behavioural patterns and credit risks of merchants on DHG' s portals more objectively.

 

Ooway Technology will also provide an integrated supply chain finance solution for merchants operating in Hong Kong on DHG' s portals, including provision of credit lines for instant cash withdrawal or order financing of offshore USD or onshore RMB.

 

Kitchen Culture unveiled plans last month to take a 30 per cent stake in Ooway Technology. Shareholders must approve the S$23.9 million deal - to be funded by issuing 90 million new shares at 26.58 Singapore cents apiece - at the upcoming extraordinary general meeting on Oct 7. The new shares would represent 21.42 per cent of the enlarged share capital of Kitchen Culture. The partnership is subject to the completion of the acquisition.