Transactions with Piminik Investments, Birch Capital, and other parties
The fraud also involved a number of questionable unauthorised loans of Company funds made byMr Kuan, and other former management personnel, to parties related to them. The existence of theseloans was actively concealed from the Board and the auditors.
As part of these unauthorised transactions, funds were advanced to an entity called Piminik InvestmentsSdn Bhd (Piminik), an entity associated with Mr Anthony Dunlop. According to the law firm, ThomasPhilip:
“At all material times, Kenneth Kuan represented to our firm that Piminik was a special purposevehicle ultimately owned and/or controlled by IOU Pay Limited and/or iSentric Sdn Bhd(“iSentric”) and/or IOU Pay (Asia) Sdn Bhd (the “IOU Group”) .....However, it now appears to usthat Kenneth Kuan may have wrongfully and/or without authority used funds belonging to iSentricto fund the [Piminik transaction].”
As part of their independent forensic audit, Crowe has been asked specifically to examine all transactionsrelating to Piminik and/or Mr Dunlop.
Piminik has itself made a loan to the Managing Director, Mr Aaron Lee Chin Wee, which continues to beexamined by the Board. The independent forensic audit by Crowe will establish whether any illegality hasoccurred in this transaction. The Board has insisted that all senior executives and management beinvestigated as required, with no exceptions. All Directors and current senior management arecooperating in full.
One of the largest unauthorised loans was made to an entity called Birch Capital Sdn Bhd (Birch). Birchis jointly owned by Mr Kuan’s wife and Piminik Investment Holdings Pte Ltd (where Mr Kuan’s sister is adirector). The sole director of Birch is Mr Kuan’s wife. Mr Kuan currently uses an email address underBirch, and so does the Company’s former Chief Technology Officer (also now dismissed). Further, MrDunlop also currently uses an email address under Birch.
In summary, the ongoing investigations and recovery actions taken by the Board have identified a numberof close links between Mr Kuan and Mr Dunlop, and a number of suspicious transactions. All possiblelegal actions are being taken by the Board to recover the misappropriated funds.
Previous Interactions with Clee
In this context, the Board notes with great concern that Mr Kuan is working with Clee Capital Pty Ltd(Clee) in its attempt to remove the Board at the upcoming Extraordinary General Meeting on 3 May 2023(EGM). The recent failed legal action by Clee in the Federal Court of Australia relied on the evidence ofMr Kuan, who swore an affidavit in support of Clee’s claim.
The Board considers that shareholders should be aware of previous interactions between the Companyand Clee, in order to fully understand the context of the current attempt to remove the Board.
In February 2021, the Company engaged Clee to undertake a capital raising for the sum of $50 million.Clee was paid a fee of 7%, amounting to $3.5 million, for this service. In addition, Clee was entitled to beissued with 15 million options, with an expiry date of twelve months, at an exercise price of $1. TheCompany announced to the ASX on 18 February 2021, the day that the capital raising was completed,that these options would be issued.
The ASX release noted that shareholder approval would be sought for the issue of the options at the nextavailable general meeting. At that time, the Company was unable to issue the options withoutshareholder approval, as its placement capacity was already full. However, the resolution to seekshareholder approval was inadvertently left out of the Notice of Meeting for the 2021 annual generalmeeting.
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