Group managing director Dato’ Tan Han Kook, executive director Ching Siew Cheong and general manager Lai Poh Mei were suspended over financial irregularities pending an internal inquiry.
At issue are a series of transactions including a €2.7m (RM 10.6m) factory refurbishment, a €17.4m (RM 69m) payment to an equipment supplier and trade in the company’s sweetened creamers segment.
The company said in a statement:“At this stage, the Board of Directors is not able to ascertain the extent of the financial and operational impact of the alleged irregularities.”
“Although, based on the issues highlighted by the auditors, the maximum exposure faced by the Group arising from the alleged irregularities may amount to approximately RM111.5 million (€28m).”
Silver Bird has formed a Special Committee from five non-Executive directors to oversee the operations of the Group.
In addition, the company has appointed accountancy firm PKF Advisory Sdn Bhd to ascertain the company’s financial position.
The internal inquiry and accounts investigation will have three months to complete enquiries.
The matter has also been reported to the Securities Commission, Bursa Malaysia Securities Berhad and the Companies Commission of Malaysia.
Debts and financials
The group added that its confectionery business was in default of repayments to lenders.
The lenders may choose to initiate legal proceedings against Silver Bird.
Silver Bird sales for 2010 stood at €149m (RM 594m), while operating profit was €2.6m (RM 10.4m).
The company operates in a market that is led by large multinationals including Cadbury, Perfetti Van Melle and Nestle, according to market analysts Datamonitor.