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Tanjung Offshore to clean house after forensic audit report

Troubled Malaysian oil and gas service provider Tanjung Offshore has vowed to put its house in order and clean up its corporate governance issues following a Ferrier Hodgson forensic audit report, local reports said.

Vincent Wee, Hong Kong and South East Asia Correspondent

June 8, 2015

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Group ceo and executive director Rahman Shamsudin said the audit results pointed to shortcuts as well as shortcomings, which then led to the weaknesses in corporate governance, including the botched deal with offshore supply vessel player Bourbon.

The company said that it had also accepted the recommendations given by its Special Task Force, which was formed to study the next course of action, adding that the recommendations would shape how the company would proceed with various deals.

“The audit specifically focused on six deals raised by minority shareholder complaints citing a lack of transparency, queries by Bursa Malaysia, a probe by the Malaysian Anti-Corruption Commission and police reports,” Tanjung Offshore noted.

These deals were the proposed reverse takeover by Bourbon, the deal to acquire the remaining shares in Gas Generators (Gastec), the purchase of property in Birmingham, a failed chromite project in the Philippines, an ethylene propylene diene monomer project in China, and a construction work request that did not materialise.

However, Rahman said the audit was a good starting point for the company as it sought to put itself on a more solid footing.

“This move was aimed at strengthening corporate governance within the group, taking a cue from recommendations of a forensic audit by Ferrier Hodgson triggered by several 'contentious transactions',” he added.

In a further development Tanjung Offshore also said it would lodge official complaints to the Malaysian Anti-Corruption Commission (MACC) on its Gastec deal and UK property transaction and engage external lawyers to review the terminated reverse takeover of the company by Bourbon as well as to review the ethylene propylene diene monomec (EPDM) project in China and the failed chromite project in the Philippines.

This contrasts with initial position in a January announcement that said an independent committee had found no improprieties or discrepancies on Gastec and UK property deals.

About the Author

Vincent Wee

Hong Kong and South East Asia Correspondent

Vincent Wee is Seatrade's Hong Kong correspondent covering Hong Kong and South China while also making use of his Malay language skills to cover the Malaysia and Indonesia markets. He has gained a keen insight and extensive knowledge of the offshore oil and gas markets gleaned while covering major rig builders and offshore supply vessel providers.

Vincent has been a journalist for over 15 years, spending the bulk of his career with Singapore's biggest business daily the Business Times, and covering shipping and logistics since 2007. Prior to that he spent several years working for Brunei's main English language daily as well as various other trade publications.

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