BH Global could lose up to S$10m ($8.07m) over a land agreement for a shipyard in Batam, Indonesia that went wrong, and other “irregular transactions”.

A subsidiary of the Singapore-listed PT BH Marine & Offshore Engineering entered into an agreement in January 2011 to procure the rights of 30 hectares of land in Batam to expand its shipbuilding business.

In December 2012 the company said the deal could not be completed as the authorities in Batam had already allocated the land to another party. BH Global has since been offered two replacement sites which it said it rejected after taking legal advice.

“The board has directed the subsidiary to seek the refund of the monies advanced to the agent for the transaction,” BH Global said.

Singapore-listed BH Global said it had alerted to other irregular transactions by the subsidiary.

“Based on the present information available to the board, both the Batam land transaction and the various potential irregular transactions may result in a potential loss of between S$8m - S$10m for the subsidiary, which constitutes approximately 8% to 10% of the company’s net asset value,” the company said.

Source: Seatrade-Asia