reporter2
26-02-12, 18:20
http://www.businesstimes.com.sg/sub/companies/story/0,4574,478669-1329854340,00.html?
Published February 21, 2012
SGX cites 'internal control weaknesses' at Fragrance Group
By JAMIE LEE
THE Singapore Exchange (SGX) has flagged 'internal control weaknesses' at Fragrance Group that include those linked to vice as part of the regulator's scrutiny over its application to have its holding firm listed.
In a regulatory filing late last Friday, Fragrance - which established the investment holding company of its hotel arm, Global Hotel, with the intention of listing it - said SGX has laid down several conditions tied to its eligibility to list Global Hotel on the mainboard.
For one, Global Hotel will need to commission an annual internal controls audit that would 'monitor and check against vice-related violations at its hotels', the company said.
The process will continue until the holding company's audit committee is satisfied that the internal controls of both Global Hotel and its subsidiaries are 'robust and effective enough to mitigate the Global Hotel's internal control weaknesses'.
And before this annual audit process is removed, the directors of Global Hotel must report to the SGX on how the key internal control weaknesses have been rectified, and the reason the company can do without the audit.
Once the audit is completed, Global Hotel must also disclose 'any material, price-sensitive internal controls weaknesses' and any follow-up action.
One analyst noted that such 'vice-related clauses' are rare, even for companies in the hotel business, adding that public perception of budget hotels could be part of the reason behind the listing conditions.
Fragrance is among the biggest budget hotel operators in Singapore, with hotels in the areas of Clarke Quay, Bugis, Little India and the 'richly diverse conservation district of Geylang', its website showed.
Other eligibility conditions included a written undertaking from Fragrance to Global Hotel that ensures that Fragrance keep a certain shareholding interest required for bank loans with covenants.
Plans for a listing of Fragrance's holding company have been floated since September, after the company announced a restructuring process.
Shares of Fragrance closed yesterday at 37.5 cents, up 1.5 cents or 4.2 per cent.
Published February 21, 2012
SGX cites 'internal control weaknesses' at Fragrance Group
By JAMIE LEE
THE Singapore Exchange (SGX) has flagged 'internal control weaknesses' at Fragrance Group that include those linked to vice as part of the regulator's scrutiny over its application to have its holding firm listed.
In a regulatory filing late last Friday, Fragrance - which established the investment holding company of its hotel arm, Global Hotel, with the intention of listing it - said SGX has laid down several conditions tied to its eligibility to list Global Hotel on the mainboard.
For one, Global Hotel will need to commission an annual internal controls audit that would 'monitor and check against vice-related violations at its hotels', the company said.
The process will continue until the holding company's audit committee is satisfied that the internal controls of both Global Hotel and its subsidiaries are 'robust and effective enough to mitigate the Global Hotel's internal control weaknesses'.
And before this annual audit process is removed, the directors of Global Hotel must report to the SGX on how the key internal control weaknesses have been rectified, and the reason the company can do without the audit.
Once the audit is completed, Global Hotel must also disclose 'any material, price-sensitive internal controls weaknesses' and any follow-up action.
One analyst noted that such 'vice-related clauses' are rare, even for companies in the hotel business, adding that public perception of budget hotels could be part of the reason behind the listing conditions.
Fragrance is among the biggest budget hotel operators in Singapore, with hotels in the areas of Clarke Quay, Bugis, Little India and the 'richly diverse conservation district of Geylang', its website showed.
Other eligibility conditions included a written undertaking from Fragrance to Global Hotel that ensures that Fragrance keep a certain shareholding interest required for bank loans with covenants.
Plans for a listing of Fragrance's holding company have been floated since September, after the company announced a restructuring process.
Shares of Fragrance closed yesterday at 37.5 cents, up 1.5 cents or 4.2 per cent.