Forvis Mazars Cleared for China Audit: Leader Environmental Tech Addresses Stakeholder Concerns Ahead of EGM

Key Highlights from Leader Environmental Technologies’ Pre-EGM Shareholder Q&A

Leader Environmental Technologies Limited (Leader Environmental) has published detailed responses to shareholder-submitted questions ahead of its Extraordinary General Meeting (EGM) scheduled for 22 September 2025. The responses focus on the company’s choice of auditor, Forvis Mazars, and address investor concerns about audit quality, regulatory scrutiny, and implications for ongoing operations—factors that could influence market sentiment and share price.

1. Forvis Mazars’ Audit Capabilities in China

Leader Environmental operates mainly in China, and shareholders questioned whether Forvis Mazars has the resources, expertise, and qualified personnel to effectively audit the company’s Chinese subsidiaries. The company confirmed that its PRC subsidiaries will be audited by Forvis Mazars (Beijing) Certified Public Accountants, an independent member firm within the Forvis Mazars professional network.
Notably, Forvis Mazars’ Singapore office also maintains a dedicated China desk managed by a native-speaking partner and team. Audit professionals are fluent in both Chinese and English and are proficient in Singapore Financial Reporting Standards, Chinese Accounting Standards, IAS/IFRS, and US GAAP. They also possess strong familiarity with local regulations and business practices.

Investor Takeaway: The robust cross-border audit platform and language competency should reassure investors about financial integrity and transparency in the Group’s China operations—an area often scrutinized for risk.

2. Regulatory Scrutiny: The Midas Holdings Incident

Shareholders raised concerns about Forvis Mazars’ past regulatory scrutiny related to its audit of Midas Holdings Limited, which was delisted due to financial irregularities. Leader Environmental clarified that Mazars LLP (the audit firm involved) was formally cleared by both the Accounting and Corporate Regulatory Authority (ACRA) and the Institute of Singapore Chartered Accountants (ISCA). Mazars was not fined, sanctioned, or subject to disciplinary action, and has continued to serve as external auditors for other listed companies and as reporting accountants for IPOs.

Investor Takeaway: The clearance of Mazars LLP by regulators reduces reputational risk and signals continued regulatory compliance. However, the historical scrutiny is a reminder for investors to monitor ongoing audit quality.

3. Board Awareness and Consideration of Auditor Track Record

Leader Environmental confirmed that its directors were aware of the Midas incident and the subsequent regulatory clearance. The board has reviewed Forvis Mazars’ audit engagements and other relevant factors, concluding that Forvis Mazars is a suitable firm to meet the company’s audit requirements.

Investor Takeaway: Board-level due diligence on audit quality is a positive governance signal, supporting investor confidence in management oversight.

4. International Audit Quality and Recent Controversies

Shareholders questioned Forvis Mazars’ track record following reports from the UK Financial Reporting Council (FRC) and media coverage of Mazars’ separation from high-profile clients (e.g., Donald Trump’s companies and cryptocurrency businesses). Leader Environmental noted that:

• The FRC conducts routine annual inspections of major UK audit firms.
• Forvis Mazars UK reviewed FRC’s 2024 findings and implemented remediation plans to enhance audit execution and supervision.
• In 2025, the FRC reported that 90% of Forvis Mazars’ audits required “no more than limited improvement,” up from 44% in 2024—a significant improvement in audit quality.

Investor Takeaway: While past controversies and regulatory findings may raise concerns, the marked improvement in FRC audit ratings is a strong positive for shareholders, indicating proactive risk management and commitment to quality.

5. Audit Partner Experience on SGX-ST Listed Companies

Investors sought clarification on the experience of Mr Chin Chee Choon, the proposed audit partner. Forvis Mazars confirmed that Mr Chin has led audits for other SGX-ST listed companies, including World Precision Machinery Ltd, MindChamps Preschool Limited, Vividthree Holdings Ltd, and Totm Technologies Limited.

Investor Takeaway: The partner’s experience with listed companies on the Singapore Exchange should reassure shareholders about audit leadership and familiarity with local listing requirements.

Potential Price-Sensitive Issues for Investors

• Audit Integrity in China: Confirmation of strong audit infrastructure and bilingual audit teams reduces risk in China operations and supports the credibility of reported financials.
• Regulatory Clearance: Mazars LLP’s formal clearance by ACRA and ISCA addresses reputational concerns, although vigilance remains warranted due to past scrutiny.
• International Audit Quality: Significant improvement in FRC audit ratings for Forvis Mazars UK reflects a positive trajectory in global quality standards, potentially reducing downside risk.
• Audit Partner Experience: Proven leadership in audits of other SGX-listed companies enhances confidence in audit processes.

Shareholders should monitor: Any changes in regulatory status, audit failures, or further controversies involving Forvis Mazars, as these could impact market perception and share value. The board’s continued oversight and periodic review of auditor performance will be crucial for ongoing investor confidence.

Conclusion

Leader Environmental’s detailed responses demonstrate proactive governance and transparency in addressing shareholder concerns about audit quality, regulatory scrutiny, and auditor experience. These disclosures, particularly the regulatory clearance and improvement in audit quality ratings, are potentially price-sensitive and could influence investor sentiment in the lead-up to the EGM.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. Past performance and regulatory clearance do not guarantee future audit quality or corporate performance.

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