APB Resources Berhad said that it acknowledges and would like to address to the Modified Opinion issued by the auditors in the financial statements, pertaining to specific deposits amounting to RM22.78 million.

In a Burssa filing the group said it had made several deposit payments to various parties whereby the payments consist of 50% advance payments for the contract sum related to the upgrading and construction of office premises and factories. It also include payments for ERP software consultation and implementation services, advance payments for the supply of pipes, 25% partial payments towards the purchase consideration for acquiring a company, and advance payments for project tenders.

However, due to economic considerations, it said these transactions were subsequently aborted, and the entire deposits were fully refunded. Despite the refunds, the auditors have recommended that the group undertake extensive procedures to verify the business rationale of these transactions and assess any potential non-compliance with applicable laws and regulations.

To address these concerns, APB said it has engaged a professional firm to conduct a thorough review of these transactions and has appointed a legal firm to determine if there were any instances of non-compliance with applicable laws and regulations. As of the date of authorization of the financial statements, the outcomes of both reviews are still pending.

The Group emphasised that these transactions, which were initiated under the direction of a former director, will not impact the operational performance or cash flow of the Company.

APB continues to operate its business as usual, the Group said it remains optimistic about its future prospects and is well-positioned to capitalise on emerging opportunities in the fabrication sector, semiconductor and beyond.