Southeast Asian fintech firm IOUpay has placed its parent company IOUpay Limited into voluntary administration with PwC Australia following the discovery of a “significant fraud” according to Fintech Futures.

IOUpay says it took this action due to a “number of outstanding debts” with “no reasonable prospect” of being able to repay them.

On 13 March, IOUpay’s board of directors uncovered a “suspected significant fraud” affecting its Malaysian office, reportedly amounting to millions. IOUpay suspects its former chief financial officer, Kenneth Kuan Choon Hsuing, of involvement in the fraud on “strong grounds”, and who was already dismissed for reasons including “refusal to obey the board’s lawful instructions”.

Hsuing is now being investigated by Malaysian authorities, including the commercial crime and anti-money laundering divisions of the Royal Malaysia Police, with efforts in place to recover misappropriated funds.As part of its recovery action, IOUpay says it initially met with a number of potential investors from Australia and Malaysia to obtain funding. It had received a non-binding debt funding proposal from Australian firm Finran, who eventually withdrew its offer.

Daniel Walley and Philip Carter from PwC Australia will take over the company as administrators, tasked with evaluating “genuine proposals” that will benefit its shareholders and creditors. The firm’s subsidiaries in Malaysia will continue to operate as usual with “minimal business disruption”.

Since the discovery of the fraud last month, IOUpay, which is listed on ASX, had to suspend trading of its shares.Headquartered in Kuala Lumpur, Malaysia, IOUpay provides fintech and digital commerce software solutions such as customer authentication, banking and payments, to institutional customers including 20 of Malaysia’s leading banks, insurers and telcos.

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