He finally did it. :)
Think about it...
You have all these rules and regulations.. which covers 'almost' everything... but then... there is lack of enforcement of the rules.
How?
It won't be effective, yes?
It makes the rules and regulations redundant, yes?
Think about it...
Have a look at these old postings once again.
Compare the crime vs the 'fine' they got. If the fine is so small compared to the 'value' of the crime, what's there to stop future crimes for happening and happening and happening? Slapping the culprits with peanuts when the crime committed is worth million only encourage more wrong doing!
Take the examples mentioned in the posting. (some of the below are just direct copy and paste from the earlier postings)
The case of Well Multi Corp:
SC said : both executives had furnished RM141 million in fictitious sales in its audited financial statement for the year ended December 2005
The stock: The stock surged from 92.5 sen on May 16 last year to RM3.32 on May 29, a whopping 258%.
The punishment: Each of the accused to one day’s jail and a fine of RM400,000 in default of one-year imprisonment.
Saturday October 30, 2010
The lack of deterrent sentencing
By ELAINE ANG
RECENT CASES
Pancaran Ikrab Bhd
Earlier this month, the construction outfit’s former managing director Ngu Tieng Ung was given a custodial sentence of one day and a fine of RM2mil for committing two counts of financial fraud involving RM15.5mil 13 years ago. Sessions court judge S.M. Komathy Suppiah allowed Ngu, 43, to pay the fine in 12 instalments starting next month, to be paid by the fifth of each month or a 30-day jail sentence if he fails. Ngu was charged with causing the transfer of RM15.5mil from Pancaran Ikrab’s bank account for the purchase of shares when the money was not meant for that purpose. The offences were committed in October 1997 and Ngu was charged in May 2005.
The Securities Commission (SC) said that under Ngu’s watch, a total of RM37mil was transferred out of Pancaran Ikrab. The money was never recovered and was written off in the company’s accounts.
Granasia Corp Bhd
In March, the Kuala Lumpur Sessions Court convicted Chan Kok Suan, the former managing director of Granasia for submitting false statements to the SC, namely the revenue and profit after tax of the company for the year ended Dec 31, 2002. The information was submitted in connection with Granasia’s proposal to list on the main board of the stock exchange. Chan was convicted under section 32B(4) of the Securities Commission Act and imposed a fine of RM500,000 in default, 10 months imprisonment, according to the SC. He was charged on Feb 9, 2006 and pleaded guilty on March 1, 2010. Prosecution has filed an appeal against the sentence to the High Court.
MEMS Technology Bhd
In February, the Kuala Lumpur Sessions Court convicted director and substantial shareholder Ooi Boon Leong and former director and chief financial officer Tan Yeow Teck for knowingly authorising the furnishing of a misleading statement by MEMS, listed on the then Mesdaq market, to Bursa Malaysia. The misleading statement is in relation to MEMS’ group revenue for the year ended July 31, 2007 contained in the condensed consolidated income statements. The Sessions Court sentenced each accused to a fine of RM300,000 (in default two years imprisonment). Ooi and Tan were charged on April 16, 2009 and pleaded guilty on Feb 25, 2010. Prosecution has filed an appeal against the two sentences to the High Court.
****Fountain View Development Bhd
The Sessions Court sentenced the company’s former director Datuk Chin Chan Leong to a fine of RM1.3mil (in default 13 months imprisonment) and a one-day imprisonment for share manipulation in February. Chin was charged with creating a misleading appearance of active trading in Fountain View shares through transactions that did not involve any change in ownership on Bursa Malaysia through 20 central depository securities accounts. Avenue Securities Sdn Bhd former remisier Hiew Yoke Lan was fined RM1mil (in default 10 months imprisonment) for abetting Chin in the said offence. Both were charged on June 27, 2005 and pleaded guilty on Feb 5, 2010. Prosecution has filed an appeal against the sentence to the High Court.
Kiara Emas Asia Industries Bhd
Last November, the SC secured a conviction against director Datuk Tan Hooi Chong for abetting Kiara Emas in the misappropriation of the rights issue proceeds amounting to almost RM17mil between Dec 16 and Dec 31, 1996. Tan pleaded guilty to the offence under Section 32(6) of the SCA 1993 read together with Section 40 and Section 109 of the Penal Code. Tan had also admitted to misutilising the rights issue proceeds for his personal benefit. He was fined RM600,000.
PAST CASES
Idris Hydraulic (M) Bhd
According to the SC website, in 2001, former Idris Hydraulic managing director Datuk Ishak Ismail was convicted by the courts for disclosing false information to the SC in a proposal by Idris Hydraulic to the SC that stated he did not hold any shares in KFC Holdings Bhd (KFC). The information submitted was in connection with a proposal for the acquisition of an asset of KFC by Idris Hydraulic. Ishak pleaded guilty and was convicted on Aug 23, 2001.
He was fined RM400,000, in default six months imprisonment. In 2003, Ishak, as a director of Idris Hydraulic, was also compounded RM400,000 by the SC for misusing RM50mil of the proceeds raised from the disposal of Kewangan Bersatu Bhd.
As a result of the compound, the charge was withdrawn.
Aokam Perdana Bhd
Teh Soon Seng, former managing director of Aokam Perdana was suspected of being involved in short-selling the company’s shares. The SC subsequently investigated him for “possible breach of securities law”. They interviewed Teh for two days in Kuala Lumpur in 2003. Teh, however, has maintained his innocence to this day. It was reported that the SC said it had previously conducted an investigation involving Teh for possible breach of the securities law. However, the investigation revealed no evidence for action to be taken against him. Teh eventually sold Aokam and resigned as its managing director on March 8, 1997 before the Asian Financial Crisis became full blown. He subsequently left Malaysia for good. Nine months later, it was reported that the Malaysian police were seeking his help in connection with the alleged theft of logs and misappropriation of funds of about RM55mil belonging to Aokam. In 1998, Aokam declared it was insolvent and could not pay some RM33.3mil in debts.
++++Omega Securities Sdn Bhd
On Aug 5, 1999, Omega Securities co-founder Datuk Tony Tiah Thee Kian and businessman Datuk Soh Chee Wen were charged in the Sessions court with defrauding Omega Securities of RM424.9mil. Tiah was fined a maximum RM3mil in default 30 months’ imprisonment on May 10, 2002, after he pleaded guilty to a charge of allowing a false report to be furnished to the Kuala Lumpur Stock Exchange (KLSE). On May 11, 2002, Tiah resigned as executive chairman of TA Enterprise and his wife took over the stewardship of the company. He returned to the post in August 2007. On June 14, 2007, Soh was fined RM6mil after pleading guilty to two charges of abetting in the submission of false statements to the KLSE relating to 44,592,000 Omega Holdings Bhd shares.
Sessions Court judge Azimah Omar fined Soh RM3mil in default 30 months’ jail on each of the two charges.
Ekran Bhd
In November 2009, Tan Sri Ting Pek Khiing and six other directors of Ekran were handed total fines of RM630,000 for breaching Bursa Malaysia’s listing requirements pertaining to a related-party transaction. The penalty for Ting, the company’s executive chairman, was RM500,000. Four directors were fined RM25,000 each and the remaining two RM15,000 each. The breaches relate to the company’s failure to disclose the change in the terms of Ting’s settlement of the remaining amount owing to Ekran. To recap, Ting took some RM712.9mil from the company as an advance in return for the injection of some of his private assets in 1996/97. The amount has been long overdue – for more than 10 years.
Renong Bhd
The deal involving United Engineers (M) Bhd’s (UEM) put-and-call option raised many unanswered questions. In November 1997, United Engineers (M) Bhd (UEM) purchased a 32.6% block in Renong, its parent company, from the market at RM3.24 per share. The total cost came to about RM2.34bil. Former Renong executive chairman Tan Sri Halim Saad entered into a put-and-call option, giving an undertaking to buy back the shares from UEM at RM3.24, inclusive of the holding cost to appease UEM’s minority shareholders and the regulator. The entire amount would come up to RM3.2bil on Feb 14, 2001, when the option was due. When the put option expired, there was however no settlement. In fact, Halim resigned from the Renong/UEM group in October 2001. Khazanah Nasional Bhd took UEM private in 2001 and later cancelled the option.
Pending cases
Kenmark Industrial Co (M) Bhd
On June 16, 2010 the SC obtained an injunction against Datuk Ishak Ismail, restraining him from dealing with RM10.2mil being proceeds from his disposal of 58.7 million shares of Kenmark. These monies will be quarantined pending the outcome of a civil suit the SC has filed against Ishak alleging that he committed the offence of insider trading and market manipulation when he purchased Kenmark shares on June 9.
Linear Corp Bhd
On Dec 29 last year, Linear was awarded a massive RM1.67bil contract to build a district cooling plant, also known as the “King Dome” project in Manjung, Perak by Seychelles-based company Global Investment Group Inc. Linear’s former director Alan Rajendram paid out its entire cash hoard of RM36mil without board approval. In June, it was found that there was no evidence of any significant progress towards the execution of the contract, and no documentary evidence to demonstrate the overall viability of the King Dome project. Linear has since been classified as a PN17 company.
A special auditor was appointed in August to look into the company’s financials and any potential irregularities. It is being investigated by the SC and the stock exchange.
Axis Inc Bhd
Axis has been embroiled in some corporate scandals over the last two years, ranging from default on loans and uncollected receivables to more unusual ones involving missing documents and even stolen machinery. The latest is that a whole load of documents, including purchase and delivery orders, bank statements and cheque butts, some dating back to 2004, had gone missing, prompting it to make massive write-offs.
Most of these documents were related to its dealings with questionable contract manfacturers. This prompted the SC to issue a “stern reminder” to public listed companies about the preservation of documents and obstruction of investigations.
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