CATALIST-LISTED waste management company Sen Yue Holdings : 5BS 0% said on Sunday (Apr 14) that it is assisting the Monetary Authority of Singapore (MAS) with an investigation into offences under the Securities and Futures Act.

 

In a bourse filing, the company said it was served with an order under Section 20 of the Criminal Procedure Code 2010 from MAS&rsquo enforcement department on Apr 12, which requires it to provide certain documents to the authorities for their investigation.

 

Such documents include all e-mails, and corresponding attachments, involving Chee Yoh Chuang and Lin Yueh Hung of RSM Corporate Advisory with the group between Aug 1, 2020, and Aug 31, 2022.

 

Sen Yue is also required to provide all meeting minutes taken during this period all contracts that it has or had with its key supplier, alongside all documents in connection with the contracts, such as transaction records financial information, including the group&rsquo s accounting records as well as the group&rsquo s segment revenue and results.

 

On top of this, Sen Yue is required to provide a detailed chronology of events relating and leading up to its corporate announcements between Sep 14, 2020, and Jul 21, 2022, along with documents in connection with the associated transactions and events in each announcement.

 

It also has to disclose information concerning both internal and external parties who were involved in the aforementioned events.

 

Sen Yue said it has &ldquo furnished certain documents to MAS&rdquo , and that it will provide the remaining documents by Apr 26, 2024.

 

The company noted that solder manufacturer Electroloy Metal and Yap Shiau Wei &ndash Sen Yue&rsquo s general manager and personal assistant to executive chairman Yap Meng Sing &ndash have also received a separate order by MAS to assist with its investigation.

 

Yap has since attended an interview conducted by MAS in relation to the investigation, Sen Yue added.

 

As of Sunday, no charges have been made against any person or the company. No restrictions or conditions have been imposed on Sen Yue or Yap by the authorities, the company said, adding that no travel documents have been retained.

 

Sen Yue&rsquo s board does not expect the group&rsquo s business and operations to be affected by the investigation.

 

&ldquo The board and the company will extend their full cooperation to assist with the investigation,&rdquo Sen Yue said, adding that the board &ldquo will continue to monitor the progress of the investigation&rdquo .

 

&ldquo The company will make further announcements to keep shareholders informed as and when there are further material updates and developments in respect of the investigation.&rdquo

 

Shares of Sen Yue have been suspended from trading since May 4, 2020.

 

After reversing into profitability during the FY2022 ended Sept 30, 2022, Sen Yue Holdings 5BS 0.00% is reporting another surge in earnings for the 1QFY2023 ended Dec 31, 2022.

 

During the quarter, the company reported a profit of $12.4 million, up from the $1.1 million loss in the 1QFY2022.

 

Revenue for the quarter surged around 5.6 times to $29.5 million from the previous period&rsquo s $5.2 million. The y-o-y growth was attributable to the normalisation of operating activity after the lifting of the judicial management order placed on the company&rsquo s wholly-owned subsidiary, SMC Industrial in August 2022. The transition into the lithium battery recycling business also contributed to the higher revenue, says the company.

 

While cost of sales went up accordingly, 1QFY2023&rsquo s gross profit came in 13.6 times higher at $15.5 million compared to the $1.1 million in the 1QFY2022. Sen Yue&rsquo s gross profit margin (GPM) for the quarter rose by 30.6 percentage points y-o-y to 52.4%.

 

Other operating income also increased by 4.2 times to $331,000 in the 1QFY2023 from $79,000 previously. This was mainly due to the reversal of impairment loss recognised on financial assets of $0.28 million. The reversal stemmed from the overall decrease in overdue account receivables.

 

Earnings per share (EPS) for the 1QFY2023 stood at 0.42 cents compared to the 0.11 loss per share in the 1QFY2022.

 

As at Dec 31, 2022, cash and cash equivalents stood at $19.6 million.

 

No dividend has been declared. The company says at this time, it is &ldquo crucial&rdquo for it to preserve cash to fulfil its obligation under the various schemes of arrangement to address its debts and the debts of SMC Industrial.

 

In the FY2022, the company posted profit of $25.2 million for the year, which is up from its $5.5 million loss in the year before.

 

In its profit guidance just days before the release of its full-year results in February, the company attributed the improved earnings to better business performance as it goes back to &ldquo normalcy&rdquo under its new management.

 

Sen Yue Holdings 5BS 0.00%   is expecting to report a &ldquo commendable net profit&rdquo in the FY2022 ended Sept 30, 2022, reversing from its loss after tax of $5.5 million in the FY2021.

 

The group attributed the better performance to the improvement in its business performance as it progresses back to &ldquo normalcy&rdquo under the helm of its new management.

 

During the 2HFY2022, the group saw a significant increase in revenue for its lithium battery recycling business under its commodities segment in the 2HFY2022. Its electro deposition (ED) segment remained profitable during the period as well.

 

In January 2021, Sen Yue suspended its non-executive chairman Koh Mia Seng from all executive duties and proposed to remove him as director. In May 2020, the group sought a trading suspension amid a board rift.

 

Sen Yue&rsquo s results will be released on or before Feb 28.

 

In addition to its statement, Sen Yue announced SMC Industrial (SMCI) has settled all its outstanding debts of about $7.5 million. The group was referring to the agreement it entered into with SYH Resources, SMC Industrial (SMCI) and a key supplier of SMCI. Under that agreement, the supplier would provide constant supply of contract waste for a period of 11 months starting from the date of first shipment, or until Dec 31, 2022, whichever is later.

 

Under the same agreement, SMCI agreed to make additional payment equivalent to 30% of the pro-forma invoice for the supplier to repay its outstanding debts. The supplier was an excluded creditor under the scheme of arrangement sanctioned by the Singapore High Court, which came into effect on Aug 2, 2022.

 

All parties are said to have fulfilled their obligations under the agreement.

CATALIST-LISTED waste management firm Sen Yue Holdings on Thursday (Dec 29) reported material variances between its audited and unaudited financial statements for the full year ended Sep 30, 2021.

 

Its audited financials showed that it incurred far higher operating expenses, which reached over S$6.4 million, versus a S$72,000 amount reported in its unaudited financials. 

 

Among other changes, the audited financials also showed a S$387,000 variance to the line &lsquo impairment loss recognised on financial assets&rsquo &ndash the audited amount was a deeper loss of S$1.2 million.

 

Sen Yue thus recorded a S$5.5 million loss in its 2021 financial year, not a profit of S$1.3 million originally reported. And its total comprehensive loss for the year, net of tax, would be S$10 million, not S$3.1 million.

 

Sen Yue explained that S$6.4 million increase to the &lsquo other operating expenses&rsquo line was mainly due to accounting for financial guarantee claims by the company arising from being a corporate guarantor for the banking facilities extended by its principal lenders to its subsidiary, SMC Industrial, at an aggregate amount of S$4.3 million.

 

Another S$2.2 million was owing to the recognition of expenses admitted by judicial managers. The amount was previously not recorded by the group, it said.

 

Sen Yue added that the increase in impairment loss recognised on financial assets was mainly due to a S$280,000 rise in the allowance for the expected credit loss and S$110,000 in bad debts that were written off.

 

Shares of Sen Yue have been suspended from trading since May 4, 2020.

THE outgoing chief executive officer (CEO) and executive director of Sen Yue Holdings have flagged disagreements with how the Catalist-listed company&rsquo s judicial managers managed the affairs of the company.

 

The grouses were made known in separate bourse filings on Tuesday (Oct 4) announcing that Neo Gim Kiong, 53, who was appointed CEO in 2015, and Liew Nyok Wah, 61, who served as executive director from 2014, will step down from Feb 4, 2023.

 

The judicial managers were appointed after DBS, Sen Yue&rsquo s bank creditor, applied to the High Court for the waste management group and its subsidiary, SMC Industrial (SMCI), to be placed under judicial management. The judicial management orders lapsed on Aug 17.

 

In the latest disclosure, Neo flagged that no resolution came out of a letter of demand SMCI sent to a company called SYH Resources in August 2021 for outstanding amounts allegedly payable to SMCI in relation to the sale of aluminium foil with cobalt and cobalt powder and a profit-sharing arrangement for supplies from a supplier.

 

A tripartite agreement was signed between SMCI, SYH Resources and the supplier, under which the supplier will be repaid in full, but it did not lead to any resolution between SMCI and SYH Resources, he said.

 

Neo suggested that Sen Yue commission a review to obtain a factual sequence of events and documents leading to the tripartite agreement.

 

Meanwhile, Liew raised an issue with an inconsistent classification of goods to the National Environment Agency (NEA).

 

Related to that, he noted that he made numerous requests for correspondences between the judicial manager of SMCI and NEA, but they were not provided, so he was forced to seek clarifications from NEA directly.

 

Among other issues, he also stated that the sale of goods instructed by the judicial managers did not follow the company&rsquo s protocols. &ldquo Queries on the compliance of the protocols were not answered. The financial impact has not been ascertained due to the non-compliance,&rdquo the disclosure read.

 

Liew also said the profitability of the group and group companies was not disclosed &ndash an issue that could implicate its white knight &ndash Electroloy Metal &ndash since new shares in the company were issued to the white knight at a price that is well below the indicative unaudited net asset value of the group.

 

Liew has recommended that the Board seek legal advice on whether it had breached the Securities and Futures Act (SFA) as a result.

 

Sen Yue on Tuesday issued a third bourse filing carrying responses of the judicial managers.

 

They stated that they had &ldquo responded robustly&rdquo to disagree that there was any issue on the classification of goods to NEA, adding that they had already responded to Liew on this allegation &ldquo previously and on 30 June 2022&rdquo .

 

They pointed out as well that NEA had confirmed on Aug 16 that they found no violations.

 

The judicial managers also &ldquo strongly disagree&rdquo that there was any non-compliance with protocols, adding that they had already responded to Liew&rsquo s allegations &ldquo previously and on 16 March 2022&rdquo .

 

They also &ldquo firmly disagree&rdquo with the SFA allegation, pointing out that the provision which Liew raised was &ldquo irrelevant&rdquo . 

 

Turning to address Neo&rsquo s concerns, they said the new controlling shareholder, Electroloy, has been &ldquo amply briefed&rdquo on the tripartite agreement, adding that Sen Yue has control over both SMCI and SYH Resources.

 

&ldquo In this context, the JM thoroughly disagrees with Mr Neo. The JM will however leave it to the Board to decide if it is relevant for the Board to commission such a review,&rdquo they stated.

 

Trading of Sen Yue&rsquo s shares has been suspended since last year.

 

WASTE-management group Sen Yue Holdings and its subsidiary, SMC Industrial (SMCI), have been placed under interim judicial management (IJM), following the court' s rule on Thursday.

 

Chee Yoh Chuang and Lin Yueh Hung have been appointed as the joint and several IJMs of Sen Yue and SMCI with immediate effect, said the group in a bourse filing on Friday.

 

Last month, DBS, its bank creditor, applied to the High Court for Sen Yue and SMIC to be placed under judicial management.

 

SMCI owes DBS around S$5.9 million and has about US$9 million outstanding, plus all accrued interest and legal costs on an indemnity basis. In January, it received a letter of demand from DBS, which had recalled banking facilities on the grounds of default.

 

The lender had demanded that the sums be paid in three weeks, failing which SMCI would be liable to be compulsorily wound up.

 

Prior to the appointment of Mr Chee and Mr Lin as IJMs, Sen Yue had on March 17 engaged independent financial adviser Borrelli Walsh to assist in providing an independent assessment of the financial position of Sen Yue and SMCI, as well as to develop a restructuring proposal to be presented to their creditors.

 

" In consultation with Borrelli Walsh, the company aims to produce a restructuring proposal for discussion with the company' s creditors in the next three to five weeks," it said in a separate bourse filing on Friday.

 

The same day, the group also said in a third statement that on March 26, SMCI had received a letter of demand from Kase Logistics (S), a logistics provider to the subsidiary.

 

Kase had demanded payment of the outstanding amounts of some S$118,000 and US$44,200 within seven days from the date of the letter, failing which Kase would then take steps " as it may be advised" to recover the amounts and/or losses and damages, as well as all interests and costs, as it may be entitled to in law.

 

Sen Yue said that the subject matter of the letter of demand has since been " amicably resolved" with Kase on March 31.

 

SEN Yue will contest the judicial management applications by creditor DBS at hearings in April and May.

 

The waste-management firm said in a regulatory statement on Friday that it will oppose the interim judicial management applications to be heard on April 1, and the judicial management applications fixed for hearing on May 10.

 

Sen Yue and SMC Industrial, its wholly owned subsidiary, are facing the applications from DBS. SMC owes the bank around S$5.9 million and has about US$9 million outstanding, plus all accrued interest and legal costs on an indemnity basis.

 

The Catalist-listed firm said that Hong Kong and Shanghai Banking Corp is participating as a creditor in the applications, but it did not say whether this bank is supporting or objecting to the applications.

CATALIST-LISTED Sen Yue Holdings has been ordered by the Commercial Affairs Department (CAD) on Wednesday to produce certain documents and information for the financial years ended Sept 30, 2015 to 2020.

 

This is in relation to offences under the Penal Code (Cap 224) and the Securities and Futures Act (Cap 289) according to the Criminal Procedure Code, the waste-management group said in a bourse filing.

 

The move came after Sen Yue chief executive and executive director Neo Gim Kiong, and audit committee chairman Chim Suan Kit Mark filed a report with the CAD on Jan 5 over matters highlighted in a recent independent review.

 

The review, conducted by Foo Kon Tan Advisory Services (FKT), supposedly found that customers of Sen Yue' s wholly-owned subsidiary SMC Industrial (SMCI) had ties to executive chairman Koh Mia Seng.

 

SMCI provides industrial waste solutions in Asia, with a niche in electronic-waste management and recycling solutions.

 

The FKT report noted certain non-disclosure of interested person transactions. The accounting firm recommended the company lodge a report with the appropriate authorities and request said authorities to carry out a full investigation.

 

FKT said there are reasons to believe there are certain fraudulent and/or fictitious transactions, as well as a high risk that some transactions between SMCI and certain companies may be fraudulent and/or fictitious. There is also evidence that criminal offences may have been committed, FKT said.

 

Mr Koh was suspended from all executive functions on Jan 8 and redesignated as non-executive chairman on Jan 13. Mr Neo has taken on Mr Koh' s duties and responsibilities in the group.

 

The group' s nominating committee considered Mr Koh' s responses to the FKT report findings unsatisfactory. Hence, it believes Mr Koh is not suitable to remain as a director of the company and its subsidiaries as the report findings " put into question his character and integrity" , Sen Yue said.

 

Mr Koh and certain SMCI staff - Koh Wen An and Priscilla Loh - are still being interviewed by CAD officers as at Wednesday. Sen Yue has not been informed by these parties if there were any formal charges or arrests, whether or not their passports have been impounded and whether or not there were any restrictions or conditions imposed by the CAD.

 

The group said it intends to fully cooperate with the CAD to assist in the investigation. Its nominating committee is also consulting with bourse watchdog Singapore Exchange Regulation about removing Mr Koh from the board.

 

" While the CAD investigation has no direct impact on the group' s operations in light of Mr Koh' s redesignation to non-executive chairman, the group still faces challenges in its business operations arising from the amounts due and outstanding to SMCI' s creditors," Sen Yue said.

 

It added that its board is preparing an update to shareholders about the report findings and an executive summary of the FKT report and Mr Koh' s responses. It will release a further announcement on the matter.

 

Separately on Thursday, Sen Yue said SMCI received a letter of demand from DBS&rsquo s lawyers on Wednesday. 

 

The letter noted that events of default have occurred under the various banking facilities granted by the bank to SMCI. DBS has recalled these banking facilities. 

 

SMCI owes DBS around S$5.9 million and has about US$9 million outstanding, plus all accrued interest and legal costs on an indemnity basis. The bank has demanded these sums be paid within three weeks or SMCI will be liable to be compulsorily wound up. 

 

Sen Yue said it is in discussions with DBS on suitable repayment proposals and the company will update shareholders as and when further material developments occur.

 

In October last year, SP PowerAssets sent a second letter of demand to SMCI to pay an aggregate balance outstanding sum of close to S$7.5 million and any accrued interest for late payment of this amount. 

 

Sen Yue called for a trading halt in end-April 2020, before converting it to a suspension in May. Its shares last traded at 2.2 Singapore cents on April 27.(see Amendment note)