Saturday, August 22, 2009

SC Should Bite On This And Not Let Go

When you falsify information in a listed company to the tune of over RM1bn, got caught, but not before the shares went on a spectacular run, and you get only a RM350,000 fine in default of a one year's prison sentence - some thing is not quite right. But then there are still powerful people everywhere. The SC rightly filed an appeal, its a ridiculous sentence after all the hard work on SC's side, and considering the material deception and the length of time the deception was washed over investors eyes. Many were deceived, there were share placements flying around on Megan media for the longest time. Gee... RM350,000 fine is like what share syndicates will make in a week. I don't think it will be a deterrent, if anything, it encourages all company owners to engage syndicates and to falsify accounts even more. RM1 bn = RM350,000 fine, gee lets ramp up earnings byRM3bn, a RM1m fine will get us all off!

Aug 21 — The Securities Commission (SC) today filed an appeal against the Kuala Lumpur Sessions Court’s sentence on Kok Hen Sen @ Kok Liew Sen for furnishing false information on the revenue of Megan Media Holdings Bhd (MMHB).

In a statement, the SC said it viewed seriously all offences involving breaches of securities laws, and would continue to seek heavier penalties to serve as a deterrent in order to maintain investor confidence in the integrity of the Malaysian capital market. Kok, aged 63, pleaded guilty in the Sessions Court for abetting the public-listed MMHB in submitting false revenue figures of over RM1 billion in its financial statement for the year ended April 30, 2006. He also admitted to three other outstanding charges of falsifying MMHB’s revenue figures for the first three quarterly financial statements of 2007.

Sessions Court judge Asmadi Hussin had on Aug 18, 2009 sentenced Kok to a fine of RM350,000 to be paid the next day in default of a year’s imprisonment.

At the material time, Kok was the personal assistant to MMHB executive chairman Datuk Mohd Adam Che Harun who was also charged under the same section as Kok, for furnishing false information on the revenue figure for MMHB’s third quarter 2007 financial figure, the SC said. According to the commission, the fraud made a significant impact on the market price of the company as the share price dropped by 85 per cent over a three-month period after the news of the false statements became known to the public.

The SC had earlier urged the Sessions Court to mete out a deterrent sentence, taking into account the fact that Kok had played a key role in the creation of fictitious invoices to support the false revenue figures. Furthermore, several financial institutions had been deceived into providing to the company trade facilities which were then used to resemble payments for the sales that did not take place, it said. — Bernama

p/s photo: Carmen Soo

1 comment:

Big Bad Wolf said...

An interesting article in The Star today.

The executive chairman mentioned in your article has degree, masters and phd from questionable universities. Why am I not suprised that he was involved in the fraud case?