KULIM (May 26): Corrugated packaging services provider Ire-Tex Corp Bhd will be appointing an international adviser to probe into related-party transactions that invoked its auditor’s qualified opinion on the group’s financial statement for the year ended Dec 31, 2014 (FY14).

"We are having a board meeting this Friday (May 29). It will be followed by an announcement to Bursa (Malaysia). We will be announcing the name of the international adviser we are going to appoint, to investigate the transactions involved," the group's executive director Dr Jim Lai Chee Chuen said in a press conference today.

Ire-Tex (fundamental: 0.85; valuation: 1.7) had on May 5, announced that its external auditor Messrs UHY had expressed a qualified opinion on the group's FY14 accounts.

Lai explained the auditor's concern was mainly pertaining to recoverability of money spent through its wholly-owned subsidiary, Zoomic Automation (M) Sdn Bhd.

Ire-Tex had previously spent RM16.5 million to purchase machinery from Zoomic, but subsequently terminated purchases of some RM5 million worth, which puts its net spending on the machinery at RM11.5 million.

"Zoomic was not able to deliver (the machines Ire-Tex ordered), so they have sub-contracted our order to Sanjung AMS Sdn Bhd. We were only notified by Sanjung that they had received the proceeds from Zoomic in April. That is why the transaction still showed uncertainties as to whether we can recover the value of the money we spent," Lai explained.

"In fact, Sanjung had came to the board to present what they can offer, and their track record. We are working closely with them. That is the progress for now," he added.

Ire-Tex closed up 1.5 sen or 4.92% to 32 sen today, giving it a market capitalisation of RM40.2 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)