Singapore regulator seeks review of fraud allegations at cosmetics firm Best World

Best World International

25/04/2019 03:12

SINGAPORE, April 25 (Reuters) - Singapore's securities
regulator has called for an independent review of fraud
allegations made by a short-seller against Best World
International Ltd  BEST.SI , which knocked 9 percent off the
cosmetics firm's share price on Wednesday.
    Shares in the closely held Singapore-listed firm have halved
since February when local media questioned Best World's sales
figures in China. The firm responded to the media report by
saying its business was sound.
    "We expect the company to call for a full independent review
of all matters raised in the (short-seller) report so that
shareholders will have a complete picture and can make informed
decisions," Singapore Exchange Regulation, the bourse's
regulatory arm, said in a statement late on Wednesday. 
    "We expect to be consulted on the terms of reference of the
review and will require the reviewer to report directly to us
and the company's audit committee," the regulator said.
    Reuters was not immediately able to reach Best World for
comment.
    Short-seller Bonitas Research on Wednesday questioned the
firm's accounting in a report titled "Best World = Fraud",
saying its "Chinese sales are a fraction of what was reported to
shareholders".
    In February, Best World said it would appoint an independent
reviewer after Singapore's Business Times newspaper said it was
challenging to understand where and how the company was selling
a line of premium skin care products in its key market China.
    At the time, the company said it conducts all areas of
business ethically and in compliance with applicable laws and
accounting standards, and was confident its business and
accounting practices would stand up to scrutiny.
    Trading of Best World's shares was halted on Wednesday
morning.

 (Reporting by Aradhana Aravindan; Editing by John Geddie and
Christopher Cushing)
 ((aradhana.aravindan@thomsonreuters.com; +65 6403 5659; Reuters
Messaging: aradhana.aravindan.thomsonreuters.com@reuters.net))