The Epicentre

of the missing Chairman and loans...

This is a company that most investors would have forgotten. At one point of time, the business is thriving due to the fact that they are the only reseller in Singapore for Apple products. The entry of more resellers and the inability to pivot into other business doomed their business.

Enter a "fraudster" and this has really become an epicentre.

Epicentre Holdings Limited (EPI) special audit report highlighted the involvement of the missing executive Chairman and CEO - Kenneth Lim Tiong Han borrowing of S$68.30 million for Epicentre Entities during the period of review.

In short, he took loans through Epicentre (SGD40.66m) and non-Epicentre entity (SGD27.64m).

I think there is some lessons we can learn from the special audit.

Lesson 1: Trust but verify

If someone has bothered to check with Elitaire Law LLP, maybe all these "loans" would have been flag out earlier.

Lesson 2: If it sounds too good to be true, it is usually so

The interest rate on the loans sound from incredible to incredulous ranging from 0% - 42% per annum. I do not know what going through the thick skull of the BOD (Epicentre and MDR).

If the interest rate is too high, it is most likely too hard for loan repayment.

Lesson 3: Be careful of conflict of interest

Kenneth Lim Tiong Han signed on behalf of EPI as a borrower and lender! I would like to be the banker who issue myself a loan!

Lesson 4: Check and balance is important

If anyone hold absolute power, he will abuse that absolute power.

I am sure no one dare object when your boss asked you to transfer an additional SGD 1.03m to his own account for the loan he had "given" to the company.

Lesson 4: If someone wants to fraud, there are million of ways to do it

Off-balance sheet account could be easily created through working with non-related entities. There is no way that we can check for fraud through audited accounts.

Lesson 5: Be careful of "friends" who ask you to hold assets for them

It could be greed or generosity but in this day and age there is really no reason to ask someone to hold their assets for you. If someone ask you to do it, that person is most probably not a friend.

Final lesson for the law enforcer:

Breadcrumbs all around…

My gut feel tells me that you can find the missing chairman in Cambodia. He could not have run far and after being in "business" for so many years, I doubt he would be willing to forsake all his valuable “contacts” and “skills” and "retire" for good.