KUALA LUMPUR: Transmile Group Bhd founder and former chief executive officer (CEO) Gan Boon Aun has been found guilty by the Sessions Court here for furnishing misleading statements to Bursa Malaysia.
The statements concerned Transmile's financial statement in its quarterly unaudited consolidated results for the year ended December 31 2006, an offence under section 122B (a)(bb) of the Securities Industries Act 1983 (SIA)
read together with section 122(1) of the same Act.
The Securities Commission, in a statement today, said the Sessions Court judge Tuan Hasbullah Adam announced the verdict this morning, and sentenced Gan to a fine of RM2.5million (in default of 18 months' imprisonment) and one day imprisonment.
The SC said it would be recommending to the public prosecutor to appeal against the sentence.
The commission said Tuan Hasbullah had found that Gan failed to rebut the deeming provision that he did not consent or connived to the commission of the offence and he had exercised all such diligence to prevent the commission of the offence as the CEO and executive director of Transmile.
Gan, 59, was at the material time Transmile executive director and CEO.
The SC alleged that Gan had overstated Transmile's revenue to give the impression that its financial performance was in line with market expectations when in fact it was not.
The SC also claimed that Gan had played a key role in inflating Transmile's revenue by creating fictitious sales transactions between Transmile Air Services (TAS) and 20 purported customers.
TAS is Transmile's subsidiary and biggest revenue contributor.
The SC said in order to make it appear as if the 20 purported customers had made payment to TAS for the fictitious sales, Gan had authorised the payment of monies from TAS to some of the 20 purported customers before the monies were transferred into TAS to be recorded as genuine payments for the flight charter services rendered by TAS.