Renaissance Services issues statement re allegations of fraudCompany News // August 19, 2011
Renaissance Services SAOG has released the following statement:
"On 15 August 2011 Renaissance Services SAOG released the quarterly Chairmanís Statement and unaudited accounts for the half-year. Based on various interpretations and assumptions arising from that report, concerning our subsidiary Topaz, we wish to issue this statement to clarify the following:
"Breach of Code of Business Conduct
Reports on the Chairmanís Statement have focused primarily on the subject of fraud. The investigation into these matters, has so far centered on US$2.9 million of cash over a six-and-a-half year period, of which a portion appears to be connected with fraud or misappropriation.
"Without diminishing the seriousness we attach to any matters of this kind, this should be seen in context of materiality of a business that has generated revenues in excess of US$3.5 billion over that same period.
"We have included this matter as a disclosure, precisely because of our zero tolerance of such events and our disclosure policy. Within the company operations, the breaches in Code of Business Conduct are now a matter of history, the violations have been identified and stopped and perceived control weaknesses have been strengthened to ensure prevention of future repetition. The ongoing investigation is based on the fact that we have identified all the potential issues, which may now be ruled in or out of the process, as we seek to close out these matters administratively.
"Topaz Management Departures
There is speculation that all management departures in this period are directly linked to the subject of fraud and other ethics violations. This is incorrect. Only one manager has been dismissed due to a direct connection with the alleged fraud. He was a junior level finance manager in an overseas subsidiary of Topaz.
"The resignations and departures of senior Topaz corporate managers described in the Chairmanís Statement, have either been in the context and course of the overall operational and business challenges we have described, or have been accepted in the normal course of business as part of the cost savings described.
"Potential one-off negative impact issues
The Chairmanís Statement explains that we are facing a number of historical issues that may have potential one-off negative financial impact as high as US$30 million. Some reports have connected this figure to the alleged fraud and others to the restructuring of the company. This is incorrect. The potential $30 million impact is directly linked only to operational and business issues only.
"Timeliness of Disclosure
With respect to timeliness of disclosure: there are many issues disclosed in the Chairmanís Statement that are in fact in advance of actual outcome, but provide guidance to stakeholders that an issue may arise and provide assurance that we are doing everything possible to mitigate impact. There are other issues for which events have unfolded along a timeline, where premature disclosure may compromise a process or cause harm to the company. These have been disclosed at the first appropriate opportunity. Renaissance adheres strictly to Capital Market Authority (CMA) and Muscat Securities Market (MSM) regulations. The timing and level of disclosures in all Renaissance statements either meet or exceed the regulatory standards set.
"Business as usual In the meantime we assure our stakeholders we are pressing ahead with resolving the challenges and pursuing our ongoing business as usual. As stated clearly by our Chairman ďThe fundamental strengths and value of Renaissance remain intact and there is every reason to be confident for the future ahead of us.Ē