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Acra rejects BDO's application to resign as Mirach Energy auditor
THE Accounting and Corporate Regulatory Authority (Acra) has rejected BDO's application to resign as auditor of Mirach Energy and the latter's wholly-owned subsidiary Mirach HP Management.
BDO's duties as an auditor for both companies will continue until the end of the term for which BDO has been appointed.
In a regulatory update on Friday, watch-listed investment group Mirach Energy said BDO received a letter from Acra on July 2, stating that the application was rejected.
"The premature resignation of an auditor of a public interest company or their subsidiaries is a serious matter due to the public interest implications involved," Acra stated.
Acra added it was "not satisfied" that the reasons submitted constitute exceptional circumstances to justify the premature resignation.
Mirach Energy said its board is assessing the impact of the rejection and will discuss further with BDO and other professionals to seek an appropriate course of action.
According to a June 24 regulatory filing giving notice of BDO's resignation, the auditor stated that the reason for the resignation was due to a disagreement between Mirach Energy's management and BDO on the accounting treatment for key audit matters relating to an agricultural project of Mirach Energy's Malaysia subsidiary, RCL.
The key audit matters include RCL's revenue recognition; the recovery of related trade receivables arising from revenue recognised from RCL; as well as a going concern assessment after these two matters have been resolved.
In the same June 24 filing, Mirach Energy and BDO both agreed that the latter would resign as auditors of the company and Mirach HP Management. The announcement came after Mirach Energy's audit for fiscal 2019 was temporarily put on hold.
As at 1.16pm on Friday, shares of Mirach Energy were trading at S$0.04, down S$0.04 or 50 per cent.