SINGAPORE — Mary Chia Holdings is facing heightened scrutiny from the Singapore Exchange after a subsidiary appeared in court over unpaid Central Provident Fund contributions, while the group’s independent auditor has issued a disclaimer of opinion after identifying 12 areas where it could not obtain sufficient audit evidence.
The developments have put fresh attention on the financial position and disclosure practices of the Catalist-listed beauty and wellness group, which is already dealing with a net loss, finance-team departures and questions over its ability to continue as a going concern.
SGX questions why CPF court proceedings were not disclosed
Mary Chia Holdings disclosed on Sept. 11 that its wholly owned subsidiary, Mary Chia Beauty & Slimming Specialist Pte. Ltd., appeared before the State Courts on Sept. 10 over outstanding CPF contributions.
The disclosure came after SGX Regulation (SGX RegCo) sought an explanation from the company over why the court proceedings had not previously been announced to investors.
Mary Chia said the CPF issue originated from possible omissions involving certain variable-income components. After receiving employee feedback in September 2025, the company said it reviewed its CPF records and found similar discrepancies at several subsidiaries.
The group subsequently submitted rectification reports to the CPF Board and arranged payments toward the outstanding amounts.
As of Sept. 10, the subsidiary had paid S$91,925.50 toward its CPF liability, including a payment of S$11,291 on Sept. 9. Another S$50,208 remained outstanding at that point. The court proceedings have been adjourned to Oct. 8.
Sponsor disagrees with Mary Chia’s disclosure position
The controversy intensified after Mary Chia’s Catalist sponsor, Evolve Capital Advisory, publicly disagreed with the company’s position that the matter did not require an earlier announcement.
Mary Chia maintained that the CPF arrears were an operational payroll-compliance matter being rectified and were not expected to materially affect its share price or create a false market.
Evolve, however, took a different view.
The sponsor said it learned about the CPF arrears during an internal audit meeting on May 25 but was not informed that court proceedings had started or were imminent. It only became aware of the court appearance on Sept. 11.
Evolve characterized the court proceedings as a significant escalation from an administrative compliance issue and said investors should have been informed promptly so they could assess the potential implications.
Auditor flags 12 unresolved areas
The CPF dispute is only one part of the company’s latest financial challenges.
Independent auditor Foo Kon Tan LLP issued a disclaimer of opinion on Mary Chia’s FY2026 financial statements after saying it could not obtain sufficient appropriate audit evidence in 12 areas.
Those areas include:
- opening balances;
- impairment of assets;
- inventories and purchases;
- receivables;
- lease liabilities;
- borrowings;
- payables;
- revenue;
- staff costs;
- related-party transactions;
- income taxes; and
- going concern.
A disclaimer of opinion is significant, but it should not be interpreted as the auditor declaring that all of the company’s financial figures are wrong. Rather, the auditor was unable to obtain enough evidence to form an audit opinion on the financial statements.
Revenue and staff-cost questions emerge
Among the unresolved issues, the auditor said it could not adequately verify the appropriateness of reported FY2026 revenue of S$11.88 million or contract liabilities of S$4.01 million.
It also could not obtain sufficient evidence concerning approximately S$2.85 million in accrued staff costs, which included outstanding salaries and CPF contributions.
Mary Chia reported an audited net loss of S$2.64 million for FY2026, which was S$289,000, or about 12 per cent, higher than the unaudited loss of S$2.35 million announced in May.
The company attributed many of the accounting difficulties to substantial departures from its finance department. Some departing employees had extensive knowledge of the group’s historical financial records, creating challenges in gathering supporting documentation for the audit.
Going-concern concerns add pressure
The auditor also raised significant uncertainty about Mary Chia’s ability to continue operating.
The group’s controlling shareholder, Suki Sushi, has indicated that it will provide financial support for at least 12 months and will not demand immediate repayment of amounts owed by Mary Chia.
However, the auditor said it lacked sufficient evidence—including financial information demonstrating Suki Sushi’s ability to provide that support and Mary Chia’s FY2027 cash-flow forecast—to determine whether the going-concern assumption was adequately supported.
Mary Chia’s directors nevertheless said they believed it remained appropriate to prepare the financial statements on a going-concern basis.
The company is also considering possible ways to raise additional working capital, including a rights issue, share placement or shareholder loans.
What happens next?
The company is expected to face continued investor attention as it works to strengthen its finance function, resolve outstanding accounting questions and address the CPF matter.
Mary Chia said it plans to rebuild its finance team, improve the centralized storage of accounting records and consider temporary or outsourced accounting support, depending on available financial resources.
Its annual general meeting is scheduled for Sept. 28, while the CPF court matter is scheduled to return to court on Oct. 8.
For investors, the key question now extends beyond the CPF arrears: Can Mary Chia resolve the audit issues, strengthen its financial controls and secure enough funding to stabilize the business?
The answers could determine how the market views the Catalist-listed group’s next chapter.
Leave a Reply