[SINGAPORE] Fu Yu Corporation has confirmed that its unit’s US$3 million payment to a third party, that has been the subject of a probe, was made for services that were rendered.
In February, investigations into the affairs of its subsidiary Fu Yu Supply Chain Solutions (FYSCS) had revealed that the unit made unverifiable arrangements concerning a payment of around US$3 million, for which services did not appear to have been received.
In a Monday (Sep 1) update on an ongoing probe into FYSCS’ activities, parent company Fu Yu Corp said that investigations have confirmed that the services underlying its unit’s payment to KWW Consultancy were rendered.
These services were trades executed by KWW Consultancy on FYSCS’ behalf, that the unit profited from. KWW Consultancy is a company owned by Wong Ka Wing, a FYSCS employee. Wong and KWW Consultancy’s director Tan Xin Yi are friends with Victor Lim – Fu Yu Corp’s largest shareholder who is involved in the probe.
The two parties entered an agreement in July 2022, whereby KWW Consultancy agreed to make trades on FYSCS’ behalf.
The investigation further revealed that the payment was made to a third party entity, Arc International Energy, which appears unrelated to either party.
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KWW Consultancy had assigned Arc International Energy to receive the payment through a deed of assignment and indemnity deed dated Nov 9, 2022, but the investigations were “unable to conclusively state what the commercial rationale” of this arrangement was.
The investigations’ findings also touched on the potential misuse of FYSCS’ resources, which was another subject of the probe.
Regarding the matter of the unauthorised use of an e-mail by third parties, the investigations revealed that Lim’s girlfriend had used it to source for and negotiate deals on behalf of the FYSCS. This was done on a purported “goodwill basis” and she was not found to have been paid.
Other employees also had access to the e-mail account.
The investigation could not ascertain if reimbursement claims Lim made during his tenure as FYSCS’ director of strategy were solely for the unit’s benefit.
These claims totaled to S$9,427.76.
The investigation found that some expenses were incurred with persons who did not have commercial ties to FYSCS at the time they were recorded.
However, it could not rule out the possibility that these were prospective clients or suppliers, as the company does not keep records of its prospects.
Shares of Fu Yu ended on Monday 1 per cent or S$0.001 higher at S$0.103.
