KUALA LUMPUR (Nov 30): Lambo Group Bhd has said its indirect wholly owned subsidiary in China, Fujian Accsoft Technology Development Co Ltd, is deemed to have been "cancelled" as a company as of May 16.
"Fujian Accsoft had on March 4 submitted the deregistration application to the China authority and the said deregistration process had been completed on May 16," the group said in a bourse filing, citing a legal opinion it received on Wednesday (Nov 30) from Allbright Law Offices, the China law firm appointed by Lambo.
The information technology and e-commerce service provider said Allbright had not been able to travel to Jin Jiang where the deregistration of Fujian Accsoft was filed to retrieve the deregistration documents due to the current Covid-19 restrictions in China.
It said the impact on the assumption that the subsidiary was deemed disposed was reflected in the group's results for the quarter ended Sept 30, 2022 based on internal assessment and subject to auditor confirmation.
Prior to this, Lambo had reached out to China's finance ministry and the past and present auditors of Fujian Accsoft over alleged wrongdoing in relation to the Chinese firm's financial report.
China's Global Times reported in July that the country's finance ministry had imposed an administrative fine against an accounting firm for cross-border accounting audit supervision on Fujian Accsoft.
The report said that Fujian Accsoft's 2016-2018 financial reports were seriously falsified and constituted a suspected crime, and added that the accounting firm should take major responsibilities for the audit of the financial statements amid severe lack of audit procedures.
The ministry's inspection also found that Fujian Accsoft continued to see losses from 2016 to 2018 and it had no more than five employees during the time.
Fujian Accsoft was involved in software development, internet information services, enterprise management and consulting services.
Lambo's share price finished unchanged at five sen on Wednesday, bringing a market capitalisation of RM77 million.