Best World admits main client is owned by CEO's brother-in-law
SGX orders Changsha Best, Best World's main customer, to hand over records
The Singapore Exchange (SGX) is digging deeper into the business dealings of Best World International, after the mainboard-listed skincare products company yesterday confirmed allegations that its chief executive's brother-in-law is the owner of Best World's largest client in 2017.
Changsha Best was Best World's primary import agent in China, until Best World switched from an export model to a franchise model last year.
In a notice of compliance issued to Best World yesterday, SGX is requiring it to procure Changsha Best and other import agents to hand over copies of their financial information, accounting and corporate records to SGX RegCo, the regulatory arm of the SGX.
SGX said: "The revelation of the relationship between Changsha Best and the company's CEO and managing director raises serious concerns about the veracity of the China sales conducted under the export model from 2015 to 2018 and whether these were conducted on normal commercial terms."
Earlier yesterday, Best World had apologised for failing to provide a fuller picture of the ownership of Changsha Best.
It said Mr Koh Kim Chuan - brother-in-law of Best World chief executive Dora Hoan, and the sole shareholder and legal representative of Changsha Best - was a "passive investor".
It added that neither he nor his wife, Ms Mary Huan - Ms Hoan's sister - was responsible for Changsha Best's management and business operations.
Best World told investors last week that Changsha Best was an independent third party and that it would sue short-seller Bonitas Research, which had claimed otherwise.
SGX now wants Best World to "render all reasonable acts of assistance including and not limited to access and contact to the customers, warehouses and delivery service providers (including procuring the warehouse and courier documents) of Changsha Best and other import agents to SGX RegCo, the independent reviewer or any person(s) as directed by the Exchange".
Best World is already the subject of an independent review that SGX ordered last month.
SGX has now ordered the independent reviewer, PwC, to report "solely to SGX RegCo" on the scope and all findings of its review. PwC was initially told to report to both SGX RegCo and Best World's audit committee.
SGX also wants the scope of the review expanded to determine the veracity of the group's sales in China under the export model from 2015 to 2018, and whether these were conducted on normal commercial terms.
SGX has suspended trading in shares of Best World since last Thursday, with the suspension set to continue until it finishes investigating its China sales.
Best World shares last traded at $1.36 before trading was suspended.- THE STRAITS TIMES
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