Accounting Fraud Updates: Megan Media Holdings Berhad

Kenneth Kok, ex financial controller and personal assistant to the executive director of Megan Media Holdings Berhad was fined RM350,000 in default a year’s jail by the Sessions Court for abetting the company to make a false statement to Bursa Malaysia.

 

This is actually a follow up by Securities Commission as it had on 10 December 2007 made an announcement to seek Interpol to help to arrest George Yeo Wee Siong who was the executive director of MMHB.

 

At that announcement, Kenneth Kok was charged under section 122B(a)(bb) read together with section 122C(c) of the Securities Industry Act 1983 (SIA) for abetting MMHB in furnishing to Bursa Malaysia the following false revenue figures:

  • RM1,034,797,000 reported in MMHB and its subsidiaries’ Financial Statements for the year ended 30 April 2006
  • RM230,365,000 reported in MMHB’s Quarterly Report on Consolidated Results for the financial period ended 31 July 2006
  • RM238,134,000 reported in MMHB’s Quarterly Report on Consolidated Results for the financial period ended 31 October 2006
  • RM306,150,000 reported in MMHB’s Quarterly Report on Consolidated Results for the financial period ended 31 January 2007

Dato Dr Hj Mohd Adam was charged for furnishing a false statement relating to the revenue figure of RM306,150,000 in MMHB’s Quarterly Report on Consolidated Results for the financial period ended 31 January 2007 under section 122B(a)(bb) read together with section 122(1) SIA. Upon conviction, the accused persons are liable under section 122B SIA to a fine not exceeding RM3 million or to imprisonment of not more than 10 years or to both.

 

In the Court, Kok Hen Sen @ Kok Liew Sen, 63, pleaded guilty to abetting the company, which is listed on Bursa Malaysia’s main board, in making a false statement that Megan Media made an income of RM1.03 billion in its subsidiaries financial statement for the year ended April 30, 2006.

 

He admitted that :

  • he allowed his company,DVD Pioneer Sdn.Bhd to be used as a customer for Megan Media.
  •  instructed his account executive Tong Kok Yong to create fictitious sales. There were payments made for these fictitious sales from trade facilities granted to Megan Median by various financial institution.

 

Earlier background of Megan Media

 

 

Megan Media Holdings Bhd, which had been hit by accounting scandals, reported an unaudited net loss of RM67.19 million for the first quarter ended July 31, 2007 compared with a net profit of RM13.45 million in the previous corresponding quarter.

Announcing its results on Sept 28, it said  Revenue plunged to RM11.5 million from RM230.3 million a year ago. Loss per  share was 33.08 sen.

  • Compared with the fourth quarter ended April 30, 2007, the loss before taxation was reduced from RM1.38 billion to RM67.2 million largely due to the fact that significant write-off was made in the fourth quarter arising from the financial irregularities uncovered by the investigative audit.

        Among the irregularities were fictitious trading creditors and debtors created by its subsidiary Memory Tech Sdn Bhd to overstate purchase and sales, and its financing of payments to fictitious trading creditors through bank debts.

        On the prospects, the viability of the company and the group as a going concern depended “on the completion of a successful implementation of debt restructuring and regularisation plans”. Incidentally, the company has eight months, since June 19, 2007 to submit a regularisation plan to the relevant authorities. In a separate statement, it said that under Bursa Malaysia Securities’ listing requirements, it had to provide its audited financial statements for the financial year ended April 30, 2007 for public release within four months, which was on or before Aug 30, 2007. Failing to do so could result in its suspension.Meanwhile, the auditors of the company and its subsidiaries were still finalising the audit of the financial statements of the group for the financial year ended April 30, 2007. Upon completion of the audit, the company will release the audited accounts for the financial year ended April 30, 2007. [On Sept 21, Megan Media’s unit Memory Tech Sdn Bhd (MTSB) has been served a winding-up petition by Mayban Trustees Bhd in respect of a default on a total of RM472.83 million Bai Bithamin Ajil Islamic debts securities. The securities issued by MTSB were RM320 million primary bonds, RM112.27 million non-detachable secondary bonds and Hibah promissory notes of RM40.56 million. Following MTSB’s inability to honour maturing banking facilities, Mayban Trustees had issued a declaration of event of default on May 30, followed by a demand for payment of RM436.11 million on June 5, 2007.]

It has failed to submit its regularisation plan to the Securities Commission and other relevant authorities for approval within the timeframe stipulated in paragraph 8.14C of the LR and paragraph 4.0 of t PN17 i.e. by 18 February 2008 and no further extension of time has been granted by Bursa Securities.

Bursa Securities had earlier announced on 19 February 2008 that it has commenced de-listing procedures against the Company.

After due consideration of all facts and circumstances of the matter, Bursa Securities has decided to de-list the securities of the Company from the Official List of Bursa Securities as the Company does not have an adequate level of financial condition to warrant continued listing on the Official List of Bursa Securities.

Accordingly, please be informed that the securities of the Company will be removed from the Official List of Bursa Securities at 9.00 am on Wednesday, 23 April 2008

Share and Enjoy:
  • Digg
  • del.icio.us
  • Netvouz
  • DZone
  • ThisNext
  • MisterWong
  • Wists

August 18, 2009  Tags: ACCOUNTING FRAUD IN MALAYSIA  Posted in: ACCOUNTING FRAUD/SCANDALS, Malaysia & Asia Pacific

Leave a Reply


WordPress SEO fine-tune by Meta SEO Pack from Poradnik Webmastera
    • Google PageRank Checking tool