KUALA LUMPUR (Oct 18): CN Asia Corp Bhd said Messrs Ong & Wong Chartered Accountant has resigned as its external auditor, as the firm has been temporarily banned from auditing public interest entities.

At the group’s annual general meeting in June, Ong & Wong was reappointed to hold office as its external auditor until the conclusion of the next AGM, CN Asia said in a stock exchange filing.

However, the firm has tendered its resignation after it was notified by the Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) that it was prohibited from auditing financial statements of public interest entities for 12 months, commencing on Sept 7.

CN Asia said it is in the midst of identifying a new external auditor.

Ong & Wong and its three audit partners — Ong Koon Liang and Ong Kong Lai — were found to have failed to comply with the relevant International Standards on Auditing and International Standard of Quality Control 1, when auditing two public interest entities clients, according to AOB.

CN Asia is principally involved in the manufacturing and trading of underground and skid tanks, dish ends, pressure vessels, road tankers, and pipings for the petroleum industry.

Last week, the group announced that it was planning to place out up to 40% of its issued shares, to raise as much as RM16.45 million to fund its money lending business and repay bank borrowings.

CN Asia has been in the red since the financial year ended Dec 31, 2019 (FY19). It widened its net loss to RM3.34 million in the first half of FY22, from RM1.37 million a year earlier, while six-month revenue decreased to RM4.965 million from RM5.24 million.

CN Asia’s share price finished 5.66% higher at 28 sen on Tuesday (Oct 18), giving it a market capitalisation of RM52.34 million. The counter has fallen by 41.67% year-to-date.

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SC's AOB prohibits Ong & Wong, audit partners from auditing for one year