CDW Hldgs, involved in manufacturing and supplying precision components, has uncovered "unusual" bank transfers of Rmb30.0m or S$5.8m each btwn its Shanghai subsi and an external co which took place last yr without the board's knowledge. For now there is no evidence that its subsidiary, suffered any loss due to these transfers.The executives responsible for the transfers have been suspended and the board will decide disciplinary action...
A PRC lawyer commissioned by CDW to investigate has also stated that the transfers made by did not constitute misappropriation of funds under PRC laws. An audit committee has been set up to review the co’s financial controls as well...
Amt of $5.8m for each transfer is substantial considering co’s recently reported FY2010 profit was US$3.4m (S$4.3m). Co had cash balance of approx US$37.7m as of 31 Dec 2010 (unaudited). This follows a slew of accounting and management issues after China Hongxing, Hongwei Tech and Tat Hong’s JV.
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