Camsing Healthcare's special audit flagged circular sales — chairman held in China

Camsing Healthcare, a Singapore mainboard-listed health group, was directed in March 2019 by SGX RegCo to undertake a special audit after its auditor Deloitte raised concerns about certain sales and purchases from FY2017 to FY2019 and whether they were entered into with related parties. The company's former independent directors resigned citing "unresolved differences with the board", and the FY2019 audit was put on hold pending resolution.

RSM Corporate Advisory's published findings centred on three entities: Global Biotech Medical, Caring Global Health Management (Beijing) and I-Nitra Consulting. Nature's Farm sold $9.4 million of health supplements to Global Biotech in FY2017-18 — about 47% subsequently consigned back through I-Nitra — and roughly 60% of the supplements eventually "returned" in FY2019 and FY2021, some bought back at a fraction of their sale price ($47,000 for goods once sold for about $1.23 million). RSM found no conclusive evidence of round-tripping but noted Nature's Farm appeared to have profited.

RSM also flagged a $2.8 million purchase of wearable devices from Global Biotech in FY2019, approved by Nature's Farm's CEO without board approval and paid in full before delivery — none had been sold by March 30, 2020 because the devices were not customised for Singapore ($2.4 million was later refunded). Executive chairman and controlling shareholder Lo Ching and Jiang Shao Yang, a sole signatory on some bank accounts who was not an employee, were taken into criminal custody by Shanghai police in June 2019.

Sales to an exclusive distributor that kept returning through the distributor's own distributor inflated the group's revenue picture.

The $2.8 million device purchase bypassed the board, was paid in full up front and produced devices unsellable in the Singapore market.

A non-employee held sole signatory rights on company bank accounts — a control failure at the centre of the audit findings.

Independent directors resigned with material audit issues unresolved, leaving the board without the people best placed to resolve them.

Revenue that keeps coming back through the customer's own distributor is not growth — it is inventory taking a round trip through the P&L.

SGX RegCo issued a Notice of Compliance requiring advance notice of any future transactions with the three entities and an independent review of internal controls and governance practices, said it would report the findings to the relevant authorities, and warned it would weigh the directors' conduct when assessing their future suitability for listed-company roles.