Probe launched on debt-laden APP, say reports
Singapore authorities have opened an investigation into debt-laden Asia Pulp & Paper (APP) and two of its sister companies, according to reports.
Officers from the Commercial Affairs Division (CAD) were understood to have visited the offices of APP, Asia Food & Properties (AFP) and Golden Agri Resources last week and removed documents and computers, The Business Times reported.
News of the probe is the latest twist in the affairs of Indonesia's Sinar Mas group, of which the three companies are part. APP is one of the emerging markets' largest borrowers, owing creditors US$13.4 billion.
The unit of the Widjaya family empire suspended debt repayments in March and is due to present a long-delayed, draft restructuring plan next month.
APP faces a series of class-action lawsuits in the United States, which allege the firm used dubious accounting practices to raise millions of US dollars.
Calls to APP, AFP and Golden Agri Resources requesting comment were not returned yesterday. An official from the CAD also declined to comment on the case.
The Business Times quoted a spokesman for APP as saying: 'APP has been asked to assist the CAD and is giving its full co-operation. APP is not aware, nor has it been informed, about who the CAD is investigating.'
The paper quoted an APP spokesman as saying: 'Yes, we have been visited by the CAD but we do not know what specifically is being looked at. As far as the company is concerned we will extend to them our full co-operation.'
It is likely any CAD investigation will prove time-consuming and costly as the company's affairs are tangled. Audited financial statements for APP for last year have yet to be released.
In addition, the company's accountants, Arthur Andersen, recently resigned, without citing a reason.
The Business Times reported sources saying Arthur Andersen 'had informed the Registry of Companies and Businesses about two months ago that it was not satisfied with certain aspects of the company's accounts'. There was no comment from Arthur Andersen's Singapore office.
APP has attracted criticism as it faces legal action following its debt-repayment moratorium.
In August, Mark Mobius, managing director of Templeton Asset Management, urged action by authorities.
'A billion [US] dollars is missing and not accounted for,' Mr Mobius said in a television interview. 'Of all the governments in the region, Singapore should be the one going after this aggressively.'
Mr Mobius was referring to the US$1 billion that three APP units in Indonesia have claimed they are owed by five companies registered in the British Virgin Islands.