Special audit for Advance Modules

THE Singapore Exchange (SGX) has directed Advance Modules Group to appoint special auditors immediately to investigate the affairs of the company, including a US$11.89 million acquisition that has been questioned by its auditors.

Advance Modules, which disclosed this yesterday, said it is in the process of appointing Messrs KPMG to undertake the special audit. The special auditors will report to both the company's audit committee and SGX.

Trading in shares of Advance Modules, a manufacturer of memory modules and flash memory products, was halted yesterday prior to the release of the news in the evening.

The company earlier disclosed concerns from its auditors, Horwath First Trust, in its 2007 full-year financial statement on March 31.

Advance Modules had made deposit payments and acquired new machinery and equipment amounting to around US$11.89 million, but Horwath did not 'consider evidence and information made available to them sufficient for them to form an opinion on the validity of the acquisition'.
Horwath recommended that the company's audit committee commission a special audit to look into the validity of the acquisition, and the board, following the audit committee's advice, has agreed to appoint an independent auditor to do so.

Shares of Advance Module resume trading today.