Post Reply
121-125 of 125
Lets put this in perspective.
Potential loss is about USD250mil or SGD365m.
In 2Q07, SCM generated about SGD398m in operational cash flow, it had SGD677m in cash and a NAV of SGD1.55bil and on Fri 19 Oct, it had a mkt value of approx SGD11.5 bil.
So, in my opinion, this will hurt SCM but will hardly bring it to its knees like CAO.
CAO was of another different magnitude.
This do not seem to be that bad situation, but definitely bad enough though.
Anyway, SembMar fundamental is still intact, so just need a transition time before everybody forget about this.
Singapore, October 22, 2007 :
Steps have been taken to prevent the entry of any further Unauthorised Transactions. In light of the reasonable prospect of legal proceedings and to enable SCM and JSPL to obtain legal advice with respect to possible claims, as well as any claims by JSPL, in relation to the Unauthorised Transactions, SCM and JSPL have appointed Drew & Napier LLC jointly with Ernst & Young to investigate the Unauthorised Transactions, their nature and the full circumstances under which the Unauthorised Transactions came to be transacted and to work with a special committee of the SCM Board. The special committee shall comprise Mr Tan Tew Han, Chairman of the Audit Committee, Mr Ajaib Haridass, Chairman of the Risk Committee, Mr Ron Foo Siang Guan, member of the Audit and Risk Committees (all of whom are independent directors) and Mr Tang Kin Fei, member of the Risk Committee.
SCM has received mark-to-market information on the foreign exchange transactions from the various banks (each of which has provided information as of different dates). Based on that information, the estimated unrealised loss to JSPL arising from the foreign exchange transactions is in the region of US$165 million if the transactions are valid. This does not include the sum of approximately US$83 million which JSPL paid to one of the banks before the Unauthorised Transactions were discovered.
SembCorp Marine (?SCM?) wishes to announce that one of its employees, Mr Wee Sing Guan (Director, Group Finance), entered into various unauthorised foreign exchange transactions (the ?Unauthorised Transactions?) for the account of one of its wholly owned subsidiaries, Jurong Shipyard Pte Ltd (?JSPL?) and misled JSPL and SCM in relation to the Unauthorised Transactions. Mr Wee has been relieved of his duties at the SCM Group and has resigned his directorships in the subsidiaries of SCM, including JSPL.
SCM does not expect that this will have any impact on JSPL?s operations. It is business as usual.
The extent of impact of the Unauthorised Transactions on SCM?s results for FY2007 will depend on the movements of the exchange rates, outcome of the investigations and disputes, if any.
More information is being sought from the banks. However, SCM believes that this represents a substantial part of the unrealised loss, if the transactions are valid. SCM and JSPL are investigating and seeking advice on which of these transactions are unauthorised and whether monies already paid can be recovered.