KUALA LUMPUR (April 11): YNH Property Bhd (KL:YNHPROP) has begun implementing governance reforms in response to the findings of an independent review into RM1.1 billion worth of joint venture (JV) and turnkey contracts, the group said in a statement on Thursday.

The property developer highlighted that one of its key JV projects, Solasta Dutamas — a three-tower residential development in Mont Kiara with a gross development value of RM771 million — is progressing well and is on track for completion in 2026. The project, located on a 3.52-acre freehold site, has received strong market response, with unbilled sales expected to contribute positively to future earnings.

The independent review, conducted by UHY Advisory (KL) Sdn Bhd, raised several governance red flags, including potential related party transactions, lack of board oversight in payment approvals, and concentration of control among a small group of directors and shareholders. UHY had also recommended YNH formalise its investment policy and enhance controls over payment processing and transaction monitoring.

In response, YNH has set up an investment committee to oversee all investment-related decisions, implemented defined authority limits for payment approvals, and introduced new standardised policies and procedures to strengthen internal controls and compliance.

“The board of directors remains fully committed to refining our governance frameworks in line with regulatory expectations and best corporate practices,” said chairman Datuk Yu Kuan Huat. “Importantly, YNH’s core fundamentals remain intact and resilient.”

No mention of the RM1.1 billion in JV and turnkey contracts recorded as inventories was made in the findings YNH released on Thursday — an issue that initially triggered the review following a qualified audit opinion from Baker Tilly in 2023. In YNH’s latest annual report, the RM1 billion JVs are still subject to a qualified opinion by the new auditors.

UHY was appointed in June 2023 and had initially expected to complete the review within three months, but the process was delayed, with the report only released this week.

For the second financial quarter ended Dec 31, 2024 (2QFY2025), the group posted a sharp turnaround to RM300.33 million from RM14.35 million a year earlier, driven by the disposal of 163 Retail Park and continued contributions from Solasta Dutamas and Manjung Point Seksyen II. It managed to record an operating profit of RM9 million for the quarter, compared with an operating loss of RM4.4 million previously.

YNH’s biggest shareholders are brothers Kuan Huat and Dr Yu Kuan Chon, holding a 4.48% and 24.41% interest respectively.

At 3.36pm on Friday, YNH Property’s share price was up 9.33% to 41 sen, valuing the company at RM216.7 million. Year-to-date, the stock is down over 23.36%.

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