SINGAPORE (May 23): Precision engineering firm Allied Technologies will not go ahead with the acquisition of dormitory operator Aik Chuan Construction (ACC) and its subsidiaries.

The termination of the deal follows news that some $33 million, believed to belong to Allied Tech, had gone missing from the clients’ account of boutique law firm JLC Advisors.

A senior lawyer at JLC Advisors had also gone missing, according to The Business Times on Thursday.

See also: Annica chairman Ong quits just as JLC 'senior partner' goes missing with $33 mil of clients’ money

On April 29, Allied Tech announced it had on April 25 received a letter of intent (LOI) from ACC owner Lim Yew Ming regarding its proposed sale.

According to the LOI, the proposed acquisition of ACC was to be satisfied by between $30-$50 million cash with the remainder to be satisfied through the issue of new Allied Tech shares of not more than 1 cent each. The acquisition, if completed, would also have resulted in the reverse takeover of Allied Tech by ACC.

At that time, Allied Tech’s board said it was still considering the terms of the proposed acquisition and that no binding agreement had been entered into between the parties.

In its Wednesday filing, Allied Tech says, “The Board wishes to announce that the MOU has been mutually terminated by the parties with effect from 22 May 2019.”

On May 8, Allied Tech filed a grant of extension of time to hold its AGM for FY18 and announced its 1Q19 financial results. It also noted its auditors had highlighted the credit risk of $33.4 million in funds which were being held in escrow by JLC Advisors without any formal agreement.

On the same day, Singapore Exchange Regulation ordered Allied Tech to "expeditiously procure the release" of the funds held with JLC Advisors and place them in an account opened with and operated by an escrow agent with a financial institution licenced by the Monetary Authority of Singapore.

SGX RegCo explained that this was to safeguard the cash and bank balances of Allied Tech.

It is understood that the $33.4 million went missing before Allied Tech could transfer the funds to a new escrow account with a bank.

Allied Tech shares last traded at 1.1 cents on May 2, before it requested for a trading halt on May 3 and recommended on May 8 that the trading halt be converted to a voluntary trading suspension with immediate effect.