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Publish Date : 11-Apr-2012

Singapore-listed Sinotel Technologies announced on Monday that unauthorised purchase payments amounting to 105.4 million yuan (US$16.65 million) have been fraudulently made by an employee in its subsidiary, Xbell Union Communication (Beijing) Co Ltd.

Sinotel, which called for a trading halt in the morning, said that together with the local public security bureau in China, it has recovered 16.4 million yuan from the employee - Wang Yuxiao and his two accomplices from the finance department.

The PRC public security bureau has managed to trace the whereabouts of the balance amount and Sinotel expects to recover the balance of approximately 89.0 million yuan by April 30, 2012.

\'This is an isolated incident confined solely to the PRC subsidiary, and that none of the group\'s other subsidiaries and entities are affected by this incident,\' Sinotel said in a filing to the Singapore Exchange.

The fraudulent transactions - carried out between June and December 2011 - were uncovered in March 2012 when its auditors, Baker Tilly TFW LLP, highlighted that they were unable to complete certain procedures relating to the purchase of 4G research and development equipment and software of Xbell.

Sinotel said it may have to assess if there is a need for any impairment loss or allowance for any uncollectible amount, which it will be in a position to determine after the auditors have completed their audit.

In the meantime, the group\'s audit committee has put in place measures to safeguard the group\'s assets and reinforce its existing control procedures.

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