Thanks for your post. Just wanted to put down my thoughts on the pointers you have raised:
1. "It's just a way to legally write-off the non-existence cash without getting into trouble with the law."
* Well if what you are saying is right what have the auditors been auditing since 2007 (that's when Foreland was listed on the SGX). They have audited and duly verified the cash balance of the company every year except for 2013 (When they did not offer an audit opinion on the disappearance of the cash from the balance sheet and instead put in their resignation).
If what you are saying is correct the authorities need to take very strict action against Baker Tilly. Anyway the BDO report when it comes out should hopefully throw some light on whether the cash did exist or if was non-existent all along.
2. "This has happened to a quite a number of s chips listed on SGX and it is getting way too common. I do not see the reason why these s chips often put all their cash into the china subsidiaries instead of under the Singapore's company when most of the time, these subsidiaries are not going to use all the cash at the same time. By putting all the cash in the subsidiaries, there are huge risk of management running away with the money or sued by some so called customers seeking damages that are often many times more than the sales value. If the cash are kept with the parent co, when such cases of lawsuit seeking huge damages arises, they can just wind up the affected subsidiaries instead of paying out huge compensation in cash. Another way to prevent such cases from happening, the company can have 2 legal entities, 1 which hold the cash, PPE and doing the production, then sell to the other legal entity which will then sell to the 3rd party. Earnings from the selling entity will be returned back to the parent co in the form of dividend every year. This will help to shield the main entity from the lawsuit which makes more sense than outright giving millions of cash away."
* Thanks for your inputs. This is a suggestion we can give the officers of the SGX during future interactions with them.
