Trek 2000 posts 80% fall in 1Q earnings with CAD probe ongoing

SINGAPORE (May 8): Trek 2000 International, which is being investigated by the authorities for alleged fraudulent transactions and listing breaches, reported 1Q earnings fell 79.7% to US$112,000 ($153,000) from a year ago.

See: Trading of Trek 2000 shares halted; evidence of round-tripping, phantom sales and altered invoices involving founder Henn Tan, former CFO uncovered; AGM at 10am

See also: Tracking the financial shenanigans at Trek 2000

Earnings fell in tandem with the 48.9% fall in revenue to US$4.29 million.

Trek 2000 is assisting the Commercial Affairs Department (CAD) in its ongoing investigations linked to suspicious transactions that included round-tripping, sales involving phantom customers and products, lax inventory book-keeping, digitally altered invoices and credit notes and illogical registration of patent ownership

Trek 2000 has said that it may have to make changes to financial statements for FY2015 and FY2016, depending on the outcomes of the investigations, as the suspicious deals could have caused group sales in those fiscal years to be overstated.

In its outlook, Trek 2000 expects the industry to remain challenging in the next 12 months.