SINGAPORE Exchange Regulation (SGX RegCo) has reprimanded four former directors and the ex-CEO of Sunrise Shares for breaching listing rules, citing lapses in internal controls and inaccurate financial reporting.
The reprimand, issued on Friday (Oct 18), named former chairman and executive director Wong Siu Fai, former CEO Liang Yongdong, and three ex-directors: Zheng Aimin, Tang An, and Wang Ziquan.
As part of the regulatory action, SGX RegCo has barred Wong from serving as a director or executive officer for two years, while Liang faces a one-year prohibition, both effective from Friday.
Catalist-listed Sunrise Shares’ principal business activities include providing property consultancy and management-related services.
SGX RegCo found that the company had failed to put in place adequate risk management systems and internal controls, including financial, operational, compliance, and information technology controls.
It also noted that the company’s financial results for the first half of 2022 contained errors that overstated its financial performance.
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Specifically, the results showed a net profit of S$205,000, while the company was actually in a net loss position of S$890,000.
The errors were attributed to the incorrect classification of a US$300,000 withdrawal from a foreign exchange trading platform as revenue, and the omission of US$498,000 in trading losses from its financial statements.
These inaccuracies were not detected until February 2023, when the company was preparing its financial results for the full year, SGX RegCo said.
The regulator also highlighted the company’s failure to appoint a qualified chief financial officer (CFO) or other executives with relevant expertise, after the resignation of its CFO in 2021.
Instead, Liang, who lacked prior experience or expertise in financial accounting, assumed oversight of the finance functions on Wong’s behalf.
Additionally, Liang’s personal assistant, who had no accounting training or familiarity with financial accounting requirements, was solely responsible for liaising with the external service provider on those matters.
“There was a total absence of an adequately resourced finance function at the company,” SGX RegCo said.
“For almost two years, the company blithely operated without a CFO or any staff with the appropriate expertise and experience to manage the company’s accounting and financial reporting matters,” it added.
Shares of Sunrise Shares closed unchanged at S$0.025 on Friday, prior to the announcement.
