Sakae applies for extension to hold AGM; appointing independent auditor to review disclaimer

SAKAE Holdings' has applied for an extension to hold its annual general meeting (AGM) originally scheduled for Oct 29. (see amendment note)

The sushi restaurant operator said its board is still in the process of resolving differences and exploring options available, including commissioning an independent review of its auditor's disclaimer opinion on its full year results ended June 30, 2019.

These differences refer to recent events which saw the company's independent auditor Deloitte & Touche issuing a disclaimer of opinion.

Deloitte & Touche said it said could not obtain appropriate audit evidence and certain information related to Sakae's liquidated associates Griffin Real Estate Investment Holdings (GREIH) and Gryphon Capital Management (GCM), and Cocosa Export.

Following the release of the disclaimer of opinion, Sakae's non-executive independent director Foo Maw Shen resigned over differing views on the follow-up action to the disclaimer - a move which also prompted an SGX query.

Sakae said on Monday that it is in the process of appointing an independent auditor for the review of Deloitte & Touche's disclaimer opinion after independence checks have been conducted.

"With the completion of the review, the company's shareholders would have more information on the FY2019 financial statements, including those raised in the disclaimer and to clarify any other questions that they may have at the re-scheduled FY2019 AGM," Sakae added.

It has also applied to the Accounting and Corporate Regulatory Authority (Acra) for an extension of time to hold its AGM.

In a separate announcement on Monday, the group noted discrepancies in its audited financial results and its preliminary results for fiscal 2019.

This includes a variance of S$5.9 million for other receivables and prepayments, from amendments made to its financial statement. The company had previously relied on the group's Malaysian subsidiaries' management accounts for its preliminary results as the audit for Malaysian subsidiaries were still in progress.

Other reasons include reversal impairment on a related party of the company previously provided, and a reclassification of accounts between subsidiary and other receivable relating to Cocosa Export.

There was also a S$4.3 million variance on the company's total non-current assets, most of which came from the reclassification of accounts between subsidiary and other receivable relating to Cocosa Export.

On a group level, S$5.2 million in variance was also observed under total liabilities and equity after the group saw a variance of S$6.1 million under accumulated losses. This was due to revaluation of assets by the company and Malaysian subsidiaries, and reversal impairment on other receivables in relation to Cocosa Export previously provided.

Sakae has requested for a trading halt called on Oct 17 to be lifted. Prior to the halt, Sakae shares last closed at S$0.0812 on Oct 8, up S$0.028 or 45 per cent.

Amendment note: A previous version of this article stated that the Singapore Exchange had approved Sakae's application for an extension to hold its AGM when this is in fact incorrect. We are sorry for the error.