- K2fly (K2F) reveals a tax discrepancy of $745,000 as it continues to investigate a suspected fraud event linked to a former employee at its South African subsidiary
- An external advisor has been appointed to conduct a forensic review of the subsidiary’s tax compliance as well as to investigate the discrepancies
- The company received a progress memorandum, which has identified suspicious payments in two accounts totalling $745,000
- K2fly says an insurance claim is yet to be lodged and the investigation remains ongoing
- K2F shares down 8.33 per cent to 16.5 cents
K2fly (K2F) has revealed a tax discrepancy of $745,000 in the company’s accounts as it continues to investigate a suspected fraud event relating to a former employee at its South African subsidiary.
The company said the investigation was focused on alleged tax discrepancies between the records of the subsidiary and the records of the local taxing authority.
K2fly said the former employee of the subsidiary who was appointed as its public officer to handle taxation affairs was suspected to have been involved in the alleged fraud.
In its half year report, the company disclosed a contingent liability of $323,500.
An external adviser was appointed to conduct a forensic review of the subsidiary’s tax compliance as well as to investigate the discrepancies.
K2fly has received a progress memorandum on the investigation identifying suspicious payments in two accounts totalling $745,000. These payments have not yet been accounted for and the recipients have not been identified.
The company said it was exploring options of financial recovery through the investigation process and insurance channels.
It said insurance will likely partially cover the exposure, but a claim has not been lodged yet.
The investigation was continuing, with K2F working with the relevant authorities.
K2F shares were trading 8.33 per cent lower 16.5 cents at 11:15 am AEDT.