SINGAPORE (Apr 11): IPCO International’s new board and management is accusing their predecessors for not using proceeds from an earlier placement in accordance to what has been approved by SGX.

Back in Sept 2017, some $1.584 million was raised via the placement of 880 million new shares at 0.18 cent each to James Moffatt Blythman. With that investment, the 34-year-old Australian became IPCO’s single largest shareholder with a stake of around 14%.

According to the company at that time, half of the proceeds was to be used for the purchase of equipment and development of land in Seattle through a subsidiary called Capri Investments. The remaining half was to be used for working capital.

According to a breakdown provided by IPCO on Wednesday, out of the $1.584 million raised, 84% of that sum was used for working capital between Sept 2017 and March. Out of that amount, payroll expenses took up nearly half of it. During the same period, only $187,000 was put into Capri Investments.

Some $61,000 remains from the placement proceeds.

Since Blythman’s investment, there have been significant changes at the board and management.

At an EGM called by Blythman on Jan 19, long-time executive director cum chief financial officer Carlson Clark Smith was ousted. Two new directors, Ng Fook San and Joseph Chen, were appointed on the same day.

Smith was accused of not telling shareholders his passport was impounded as investigators pore over the penny stock saga involving former IPCO CEO Quah Su Ling and former interim CEO Goh Hin Calm. Both Quah and Goh faces charges together with alleged mastermind John Soh Chee Wen.

Smith was later sacked from the CFO job as well and was replaced by Blythman himself on March 1.

On March 17, citing doubts over “certain transactions”, IPCO asked for a delay to report its Q3 earnings, as it hired new auditor Messrs Baker Tilly to pore through the books. Instead of reporting by March 17, the company wants to report by April 14 instead.

“Depending on their findings, adjustments and/or disclosures may have to be made to shareholders in public announcements and in the third quarter financial results,” the company explained then.

For the second quarter ended Oct 31 2017, IPCO reported a loss of $508,000, down from earnings of $2.3 million in the year earlier quarter. Revenue in the same period was down 17% year on year to $11.6 million.

As of Oct 31 2017, the company’s net asset value stood at two cents – more than 10 times higher than what Blythman paid for his controlling stake.

*This article has been updated to reflect a correction. Smith had informed IPCO's board that his passport was impounded.