AUDIT REPORT The Finance Ministry pumped RM93 million into a bio-technology company that had losses of RM78 million over just three years, from 2010 to 2012.

The latest series of the Auditor-General’s Report 2013 says Inno Biologics Sdn Bhd (IBL), a company parked under the Science, Technology and Innovation Ministry, is a government tryst to manufacture pharmaceutical products based on mammalian cells.

In its book, IBL reported that it only completed two manufacturing contracts worth RM5.49 million. However, the company only collected RM0.25 million and RM0.19 million in revenue for 2012- 2013 respectively, the audit report shows.

Some RM2.68 million for work done was not paid, while some RM2.09 million has now been written off as bad debt.

"There was no guideline on asset  management and the frequency of board meetings were  not in compliance with the best practices as outlined in the  LC Transformation Manual," the audit report says.

It said that IBL had six divisions and 93 staff members.

The company suffered losses (after taxes) of RM25.73 million for 2010, RM27.18 million for 2011 and RM25.81 million for 2012.

High sales and administration costs

However, IBL saw high sales and administration costs, report says, noting that sales costs were at nearly three times its revenue in 2011 and soared to over 16 times more than its revenue in 2012.

At the end of 2012, the RM93 million company only had RM0.70 million in cash or cash equivalent in its accounts.

In 2009, the Auditor-General’s Report noted, IBL had bought two sets of Liquid Chromotography Tandem Mass Spectrometer (LCMS/MS) System worth RM1.97 million, which were not fully utilised.

In response to the audit report, IBL said that it has a new contract this year from a Korean firm, worth RM2.17 million, which may help boost its revenue.

The company also has a "business turnaround plan".

Even with almost no revenue, the company now wants to expand overseas and is in the process of looking for several strategic technical partners to do this.

IBL is a subsidiary company of Inno Bio Ventures Sdn Bhd, which is 97.2 percent owned by the Ministry of Finance Incorporated.