Senior management fully assisted accountants

I refer to your report of April 8 headlined, 'HKR, Mingly abort $1.3b Singapore deal amid provisioning sabotage suspicions'.

The report implies that provisions of United Industrial Corp (UIC) were deliberately increased to 'scupper the deal'. My chairman, Wee Cho Yaw, takes a serious view of the report.

First, there was no attempt to deliberately make higher provisions or write-downs against profits to 'scupper the deal'.

Both the UIC Audit Committee (of which Mr Wee is not a member) and the UIC Board had carefully considered the operating results for 1998, and agreed that such provisions proposed by the president and the CEO prudently reflected the financial performance and condition of the UIC Group. The company's external auditors, Ernst & Young, were also in agreement with the provisions that were made.

With regard to the allegation in your report that HKR accountants were told by UIC and Singland senior staff that they could not answer their queries until they had received Mr Wee's personal clearance, Mr Wee had never directed any UIC or Singland staff to clear responses to HKR's queries with him.

Both UIC and Singland are publicly listed companies. The companies are governed by regulations not to disclose confidential and price-sensitive information on the group to some investors to the exclusion of other investors/shareholders.