In a filing with Bursa Malaysia today, SESB said the advances were made over a two-year period, from June 2016 to June 2018.
“Upon being informed (in May 2018) that the advances had been made without prior authorisation of the board, the board had immediately commenced an investigation into the matter to obtain further information.
“As the investigation is still ongoing, the board and the audit committee are unable to provide a statement as to whether the provision of the advances was fair and reasonable or to the detriment of the company or its shareholders,” SESB said in a filing with Bursa Malaysia.
The company said it had engaged a legal firm to conduct a review of the transactions, after which a preliminary report was issued in November last year.
Following the report, the board initiated an investigative review of the transactions to be conducted by an independent audit firm, it said.
The auditors would undertake a complete inquiry to identify issues and risks that arose, after which the board would implement additional protocols to further strengthen corporate governance and enhance management accountability and transparency, it added.
Meanwhile, the company said its board had undertaken improvement and remedial action, including reviewing the management structure and terminating the shared services arrangement between the company and Scomi Group, except for “certain critical functions”.
It is also reviewing the reporting and escalation structure from management to the board, and ensuring that the chief financial officer is directly accountable to the board in reporting all material matters, including any proposed related party transactions.
Scomi Group is an investment holding and provides management services to its subsidiaries and associated companies.
It is the immediate holding company of SESB and owns 65.64% of issued shares in the company.