KUALA LUMPUR: Former Transmile Group Bhd (TGB) chief executive director Gan Boon Aun was sentenced to a day in jail and fined RM2.5mil by a Sessions Court here for making misleading statement in the company’s quarterly report to Bursa Malaysia in a case that has spanned over a decade.
Sessions Court judge Hasbullah Adam ruled that Gan, 59, would have to serve an additional 18 months in jail if he failed to pay the fine.
The judge found Gan guilty of an alternative charge at the end of the defence case here yesterday.
In his judgment, Hasbullah said Gan had failed to rebut the statutory presumption under Section 122(1) Securities Industrial Act 1983.
In his defence, Gan contended that as CEO, he was too busy to carry out tasks given to him by the Kuok (Robert Kuok) family, who was then the largest shareholder of the Transmile Group.
“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 that due to his busy schedule, he relied on the company’s chief financial officer Lo Chok Ping to check on the accounts.
“In his defence, Gan also said it was normal for him to pre-sign cheques and documents,” the judge said.
The court, however, said the accused had failed to exercise his due diligence in preventing the misleading statement from being furnished to Bursa Malaysia.
In mitigation, Gan’s lawyer Datuk Tan Hock Chuan had earlier urged the court to impose a fine against Gan as his client was a first-time offender.
In 2007, Gan was charged with abetting Transmile in making a misleading statement relating to the company’s revenue in its quarterly report on unaudited consolidated results for the financial year ended Dec 31, 2006, which had likely induced the purchase of Transmile’s shares.
Gan was also charged in the alternative with having furnished a misleading statement to Bursa Malaysia Securities Bhd with the intention 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.
He argued that the provision was inconsistent with the right to life and personal liberty under 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 furnish misleading information.
Therefore, the Federal Court ordered Gan’s case to be remitted to the Sessions Court for continuation of the trial.
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