Listed production company Scorpio East's directors sue each other for defamation

All independent directors are being sued by the non-executive Mr Hady Hartanto.

According to a company statement, Non-executive director of the Company, has commenced legal proceedings against the independent directors of the Company, namely Mr Yee Kit Hong, Mr Chia Hoo Khun Valery Kelvin and Mr Ko Chuan Aun. In this regard, Mr Hady Hartanto claims that the contents of the Announcement (including the Executive Summary of the Special Auditors’ Report annexed thereto) are defamatory of him.

Scorpio East's auditors recently released a report on the company's audited finances. In the Announcement, the company’s auditors said, “We were not provided with sufficient appropriate audit evidence to corroborate the explanations provided by the Company, including the commercial reasons, for the purported termination of the Scorpio Contracts as to whether there was (i) any financial projection on the Scorpio Contracts prior to purported termination; and (ii) adequate financial evaluation on the overall financial effect of the purported termination of the Scorpio Contracts.”

It said that the auditors were not provided with a written management representation letter that states that (i) management has fulfilled its responsibility for the preparation of the financial statements in accordance with the applicable financial reporting framework; (ii) management has provided the auditors with all relevant information and access; and (iii) all transactions have been recorded and are reflected in the financial statements.

Because of this, the auditors were not able to obtain sufficient appropriate evidence for their audit.