KUALA LUMPUR (June 17): Several penny stock companies announced the resignation of Chengco PLT as their external auditor on Tuesday, following the suspension of Chengco's licence registration by the Securities Commission Malaysia's (SC) Audit Oversight Board (AOB) over audit quality issues.
The companies are: Metronic Global Bhd (KL:MTRONIC), Nova MSC Bhd (KL:NOVAMSC), Bright Packaging Industry Bhd (KL:BRIGHT) and MTouche Technology Bhd (KL:MTOUCHE), according to the companies’ filings on Tuesday.
Metronic, Nova MSC and MTouche said they will announce the appointment of new auditors in due course.
Separately, Asdion Bhd (KL:ASDION) said it has appointed LTTH PLT as its new external auditor, following Chengco’s resignation on May 27.
The SC announced Chengco's suspension for two years last Thursday (June 12), which took immediate effect.
It also imposed sanctions on five of Chengco's audit partners, who served as engagement partners and engagement quality control reviewers for three unnamed public interest entities.
Hong Thuan Boon and Yap Peng Boon were suspended for two years, while Tan Wae Leng, Kong Tung Sam and Ng Kee Siang were barred for one year from accepting public interest entities or scheduled funds as clients or auditing them.
Following the suspension, Chengco issued a statement on Friday to say it had taken corrective measures to strengthen its audit framework. It also acknowledged the impact on its services for public interest entities and said it was working closely with affected clients to ensure a smooth transition and to minimise delays in financial reporting.
This is Chengco's second time being sanctioned by the AOB, following a previous enforcement action in 2019. Hong and Yap were also sanctioned in that earlier action.
Shares of Metronic Global closed unchanged at one sen on Tuesday, valuing the company at RM15.3 million, while Nova MSC traded flat at seven sen, with a market capitalisation of RM150.7 million.
Bright Packaging rose 9.38% or 1.5 sen to 17.5 sen, bringing its market value to RM32.9 million, while MTouche Technology last traded at two sen, valuing the company at RM18.5 million. Asdion gained half a sen or 20% to close at three sen, giving it a market capitalisation of RM12.8 million.