BERNAMA27/08/2020 04:37 PM
KUALA LUMPUR, Aug 27 -- The Sessions Court here today sentenced a former air cargo company executive director Gan Boon Aun to one day jail and fine of RM2.5 million, in default 18 months’ jail, for furnishing misleading statement to Bursa Malaysia Securities Berhad (Bursa Malaysia) in its quarterly report on unaudited consolidated results for Financial Year ending Dec 31, 2006.
Judge Hasbullah Adam meted out the sentence on Gan, 59, after finding him guilty and ordered him to serve the jail sentence today.
The court proceeding on the case started in 2010.
Gan, who was then an executive director of Transmile Group Bhd (TGB) was also the former chief executive officer of the company.
“The accused had failed to rebut statutory presumption under Section 122(1) of the Securities Industrial Act 1983,” said Hasbullah, adding that Gan as the CEO in his defence, contented that he was too busy in carrying out tasks given to him by the (Robert) Kuok family, who was the then TGB’s largest shareholder.
“With all the responsibilities borne upon him, he has no time to run the company’s daily operations and allowed TGB’s other executive director, Khiudin Mohammed to run the daily operations.
“The accused said due to his busy schedule, he relied on TGB’s chief financial officer, Lo Chok Ping to check on the accounts. Gan, in his defence also said it was normal for him to pre-signed cheques and documents,” he said.
Hasbullah said the accused had failed to exercise due diligence in preventing the misleading statement being furnished to Bursa Malaysia.
Gan was represented by lawyer Datuk Tan Hock Chuan, while deputy public prosecutors from the Securities Commission, Mohd Hafiz Mohd Yusof, Munira Masood and Mohd Shafiq Azman appeared for the prosecution.
During mitigation, Tan urged the court to impose a fine on grounds that his client was a first offender and had paid the price of his offence.
“Gan was initially charged together with Lo and Khiudin, but the charge against Lo was dropped while Khiudin was acquitted,” he said.
Mohd Hafiz however asked for a custodial sentence from 12 to 24 months jail term and a fine of RM2 million, given the role of the accused in the scheme.
“We submit the public interest must be primary in the passing of the sentence. TGB reported a net loss of RM126 million after the company finally knew the status of the account.
“After the release of the said financial statement, TGB stock price was very high (RM17) but after the announcement, it plunged to RM4 on June 29, 2007, 67 per cent drop from initial price” said Mohd Hafiz.
A total of 42 prosecution witnesses were called throughout the case which commenced on June 22, 2010 and the accused was called to enter his defence on March 16, 2011.
The defence later commenced on July 27, 2018 due to some constitutional issues raised by Gan.
In 2007, Gan was charged by the Securities Commission for abetting Transmile in making a statement that was misleading in a material relating to the company’s revenue in its quarterly report on unaudited consolidated results for the financial year ended Dec 31, 2006.
Gan was also charged with alternatively having furnished a misleading statement to Bursa Malaysia Securities Bhd with intent to deceive in the same financial statement.
According to the alternative charge, Gan was charged in his capacity as a director of Transmile Group, and the offence was committed at the Bursa Malaysia, Exchange Square, Bukit Kewangan here between Feb 14 and Feb 15, 2007.
The charge was framed under Section 122B(a)(bb) of the Securities Industry Act (SIA) 1983 (Act 280) read together with Section 122(1) of the same Act.
He was called to enter his defence on the alternative charge at the end of the prosecution's case.
In June 2011, Gan made an application to the High Court to refer a constitutional question on the validity of Section 122(1) of the SIA on grounds that the provision was inconsistent with Article 5(1) of the Federal Constitution.
In 2016, the High Court referred the constitutional questions to the Federal Court for determination.
In March 2017, the Federal Court ruled in a landmark decision that principal officers and directors are to be held liable if the companies they represent furnished misleading information.
It, therefore, ordered Gan’s case to be remitted to the Sessions Court for continuation of the trial.
-- BERNAMA
