PETALING JAYA: Transmile Group Bhd (TGB) founder and former chief executive officer (CEO) Gan Boon Aun has been found guilty of furnishing misleading statements to Bursa Malaysia.
The statements concerned TGB’s financial statement in its quarterly unaudited consolidated results for the financial year ended Dec 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.In a statement, the Securities Commission (SC) said the Kuala Lumpur Sessions Court announced the verdict yesterday and sentenced Gan to a fine of RM2.5mil (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.
“Sessions Court Judge Tuan Hasbullah Adam found 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 TGB, ” the SC said.
Gan, 59, was at the material time the executive director and CEO of TGB.
The SC alleged that Gan had overstated TGB’s revenue to give the impression that the financial performance of TGB 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 TGB’s revenue by creating fictitious sales transactions between Transmile Air Services (TAS) and 20 purported customers.
TAS is TBG’s subsidiary and biggest revenue contributor. The SC said that 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.