SINGAPORE (Sept 25): Singapore Exchange Regulation (SGX RegCo) has queried Trek 2000 International following media reports that chairman emeritus Henn Tan and three former Trek executives have been slapped with charges by the Commercial Affairs Department (CAD).

Tan, the inventor of the ThumbDrive, was the founder of Trek, and its former CEO and chairman. According to media reports, the 63-year-old is said to be facing a total of 15 charges.

These include seven counts for allegedly falsifying entries related to revenue and net profit in Trek’s FY2015 financial statements as well as creating fictitious records of sales and purchases in 2013 and 2014.

Tan is also alleged to have conspired with former CFO Gurcharan Singh between 2006 and 2011 to create false entries pertaining to licensing income of the group.

Together with Singh, Tan is also said to have conspired with former executive director Poo Teng Pin and former division president Foo Kok Wah to hoodwink external auditors Ernst & Young into believing that the FY2015 financial statements were in order.

In 2013, Tan is also alleged to have forged invoices and delivery orders to deceive E&Y into believing that the FY 2014 financial statements were in regulatory compliance.

According to reports, he allegedly also “recklessly” failed to make immediate announcements on a total of 47 interested person transactions from 2010 to 2013.

Singh, Poo and Foo face 16, eight and three charges, respectively.

The cases for the four former Trek officers will be mentioned on Nov 6.

SGX RegCo at 7.45pm on Wednesday instructed Trek to confirm whether the CAD charges are related to matters highlighted earlier by forensic accountants RSM Corporate Advisory.

RSM in April last year published a 297-page report detailing various potential breaches at the company, including round-tripping, fictitious sales transactions and the fabrication of documents going as far back as 2007.

See: Forensic auditors at Trek 2000 uncover evidence of round-tripping, sales of phantom products, lax stock-keeping and altered invoices

A few days after RSM’s damning report, SGX RegCo issued a notice of compliance requiring Trek to undertake an independent review of the company’s internal controls and corporate governance practices.

SGX RegCo had also objected to the appointment of Tan and Foo as top management executives in the company, and asked the company to hold an EGM to vote on the duo’s suitability to continue their appointments as executive officer and director.

The regulator banned Tan, Foo, Poo and Singh from holding similar appointments in other Singapore listed companies for a period of three years.

See: SGX issues Trek 2000 notice of compliance, objects to appointments of Tan and Foo

In the query to Trek today, SGX RegCo told the company to provide an update to shareholders on how the board has since addressed the internal control lapses in the group.

It also instructed Trek to confirm whether the financial impact of the matters that are the subject of the CAD charges has been publicly disclosed.

See: What was purpose of shenanigans at Trek?

Shares in Trek closed 0.4 cent lower, or down 4.9%, at its lowest-ever level of 7.7 cents on Wednesday. The counter is currently trading 70% lower than its IPO price of 25.6 cents in May 2000.