Quick take: Prestariang falls 7% as auditor flag going concern

KUALA LUMPUR: Prestariang Bhd fell over 7.2% in early trade Wednesday after its independent auditors, Messrs. Crowe included a statement of material uncertainty related to going concern in its independent auditors’ report dated Sept 19,2019.

The ICT software and training service provider shed 7.22%, or 3.5 sen to 45 sen. It is one of the most actively traded counters on Bursa Malaysia with 13.6 million shares traded.

In an excerpt of the auditor’s report, Crowe Malaysia drew attention to the termination of the Sistem Kawalan Imigresen Nasional (SKIN) project, which led to the group undertaking a legal suit against the government to recover the sums due.

The independent auditors’ report was for the financial statements of the group and the company for the financial period ended June 30,2019.

Prestariang said the opinion was based on the termination of Sistem Kawalan Imigresen Nasional (SKIN) project by the government. The group filed a legal suit against the government to recover the sums due under the SKIN project.

The independent auditors’ report pointed out that during the financial period ended June 30,2019, the group and the company recorded negative operating cash flows of RM72.25mil and RM12.36mil respectively and loss after taxation of RM8.95mil and RM53.31mil.

It also said the group has accepted advances of RM1.50mil and RM5mil from a director and a former director of the company respectively for working capital purpose.

Crowe Malaysia said the above matters indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern and whether it has sufficient cash flows to meet the obligations as and when they fall due.

Source: TheStar