SGX RegCo unveil alleged internal control lapses in Kitchen Culture Holdings

10 months ago 99

Photo from SGX.

Special auditor Deloitte found what could be a possible breach in the Employment of Foreign Manpower Act.

Singapore Exchange Regulation (SGX RegCo) announced that a special audit on Kitchen Culture Holding Limited unveiled alleged lapses in internal control lapses and unauthorised transactions.

SGX RegCo has reported the breaches to relevant authorities. These involve potential listing rule breaches relating to internal control lapses in the company’s hiring processes and new investment proposals; potential breaches of the Employment of Foreign Manpower Act and Ministry of Manpower guidelines; as well as potential contravention of directors’ fiduciary duties under Section 157 of the Companies Act.  

A special audit done by Deloitte found circumstantial evidence indicating that the company’s executive director and former CEO, Lim Wee Li, had directed the employment of two individuals for the purpose of securing employment passes in exchange for monetary benefits.

This may be a contravention of Sections 22 and 23 of the Employment of Foreign Manpower Act, SGX RegCo said in a statement.

Five possible unauthorized transactions were also found executive on behalf of the company subsidiary KC Technologies by Kitchen Culture Holding Limited’s former executive director Lincoln Teo Choon Han. These transactions were reportedly done without obtaining approval from the board.

Under the agreements, KC Technologies and Sino Allied (HK) Limited were to jointly set up a structured finance scheme for one year, to support Amazon’s e-commerce merchants with their collective procurements. KC Technologies was to fund 80% (US$480,000) of the total investment amount (US$600,000) and Sino Allied was to fund the remaining 20% (US$120,000). 

It is not in the group’s ordinary course of business to provide such financing, the SGX RegCo said.

Kitchen Culture Holding has since terminated the financing business and recovered monies extended in relation to the alleged unauthorized transactions.

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Special audit report

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