AJJ Medtech Holdings Announces Proposed Change of Auditors: Key Details for Investors

Overview

AJJ Medtech Holdings Limited (“AJJ Medtech” or “the Company”), a Singapore-incorporated entity, has proposed a significant change in its audit arrangements. The Board of Directors has announced its intention to replace its current auditors, PKF-CAP LLP, with UHY Lee Seng Chan & Co. (“UHY”), pending shareholder approval at an upcoming Extraordinary General Meeting (EGM).

Key Points of the Announcement

• PKF-CAP LLP has served as the Company’s auditors for seven consecutive audits since 25 April 2018, including the audit for the financial year ended 31 December 2024, with Mr. Lim Ryh Jye Jonathan as the most recent partner-in-charge.
• The Board’s decision to seek a new auditor is driven by corporate governance practices, cost management, and the desire to leverage fresh perspectives on the Group’s audit.
• After evaluating various proposals, including those from UHY and other audit firms, the Board and Audit Committee selected UHY, citing their experience with Singapore-listed companies and their ability to provide relevant expertise and resources.
• UHY’s appointment aligns with the requirements of the Singapore Exchange Catalist Rules (Rules 712 and 715), and the decision was made with due consideration of audit quality, cost efficiency, and continuity of audit standards.
• The change is expected to result in a savings of approximately 27% in audit fees compared to the previous auditor’s proposal for the year ending 31 December 2025, without any reduction in audit scope or quality.

Important Information for Shareholders

• Shareholder Approval Required: The proposed change of auditors requires approval by shareholders at an EGM. UHY has already given written consent to act as auditor, subject to this approval.
• No Disagreements or Dismissal: There were no disagreements on accounting treatments between the Company and PKF-CAP LLP in the last 12 months. The change is not due to dismissal or PKF-CAP LLP declining reappointment, but is part of a proactive governance and cost review.
• Regulatory Compliance: The process follows the statutory requirements under Singapore’s Companies Act, including resignation notifications to the Accounting and Corporate Regulatory Authority (ACRA), and meets all Catalist Rules for auditor appointments.
• Professional Clearance: PKF-CAP LLP has provided a professional clearance letter confirming no professional reasons why UHY should not accept the appointment.
• Cost Savings: The switch to UHY is expected to reduce annual audit fees by about 27%, which could have a positive impact on the Company’s bottom line.
• No Expected Change in Audit Quality: The Board and Audit Committee believe the quality and effectiveness of the audit will be maintained, as UHY will deploy experienced professionals familiar with the requirements of Singapore-listed entities.
• Further Details Forthcoming: A circular with more details and the formal EGM notice will be made available to shareholders via SGXNet and the Company’s website in due course.

Potential Share Price Impact

Why Investors Should Pay Attention: The proposed change of auditors is a noteworthy development for AJJ Medtech Holdings, as it is expected to deliver substantial cost savings (27% reduction in audit fees) without compromising audit quality. Such a move is likely to enhance financial efficiency and reflects the Company’s commitment to good corporate governance.

Additionally, the absence of any disputes or negative circumstances surrounding the outgoing auditor reduces the risk of negative sentiment, while the transparent and regulatory-compliant process may bolster investor confidence. If shareholders approve the change at the EGM, this could potentially be viewed as a positive signal for operational discipline and cost management, factors that can influence share price performance.

Next Steps

• The Company will convene an EGM to seek shareholder approval for the proposed change of auditors.
• Shareholders are advised to look out for the circular containing further details and the official notice of the EGM.
• The Board has expressed appreciation to PKF-CAP LLP for their service and assures shareholders that all regulatory requirements are being met.

Conclusion

In summary, AJJ Medtech Holdings’ proposed change of auditors is an actionable corporate event with clear financial implications and governance undertones. Investors should monitor the EGM process, as approval of the new auditor and resulting cost efficiencies could be catalysts for positive share price movement.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information is based on the Company’s public disclosure and may be subject to change.

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