Ex-CEO jailed a day, fined over misleading financial statement to Bursa

Gan Boon Aun was charged with intentionally furnishing a misleading statement to Bursa Malaysia for the financial year ending Dec 31, 2006.

KUALA LUMPUR: The Sessions Court here today sentenced a former air cargo company CEO to a day’s jail and fined him RM2.5 million for furnishing a misleading financial statement to Bursa Malaysia 13 years ago.

Judge Hasbullah Adam ruled that former Transmile Group Bhd CEO Gan Boon Aun had failed to cast doubt on the prosecution’s case.

Gan began serving his prison term today. If he fails to settle the fine by tomorrow, he will have to serve another 18 months in jail.

Gan’s lawyer Tan Hock Chuan had asked the court to allow his client to pay the fine by then.

Gan was called to enter his defence for an alternative charge under Section 122B (a)(BB) of the Securities Industry Act. He was alleged to have the intention of furnishing a misleading statement to Bursa Malaysia in regard to Transmile Group’s quarterly report on its unaudited consolidated result for the financial year ending Dec 31, 2006.

“The accused failed to rebut the statutory presumption under Section 122(1) of the Securities Industry Act,” said Hasbullah.

The court said that in Gan’s defence, as CEO, he was too busy carrying out the tasks given to him by the Kuok family, which was the largest shareholder of Transmile at the time.

“He had to contend with the responsibilities and had no time to run the company’s daily operations,” the judge said.

“And he allowed the finance director, Khiudin Mohammed, to run the company’s daily operations.”

Gan, in his defence, said that due to his busy schedule, he had relied on his chief financial officer, Lo Chok Ping, to check the accounts document.

“The accused failed to exercise due diligence in preventing the misleading statement from being furnished to Bursa,” Hasbullah said.

During mitigation, Tan urged the court to impose a fine on Gan on grounds that the case was a “peculiar” one.

He said Gan was initially charged together with Khiudin and Lo, but the charge against Lo was dropped while Khiudin was acquitted.

Deputy public prosecutor Mohd Hafiz Mohd Yusoff sought a deterrent sentence against Gan.

He later told reporters that the prosecution would seek instructions from the Attorney-General’s Chambers on whether to appeal to enhance Gan’s prison term.

The prosecution called 42 witnesses to testify from June 22, 2010 to Jan 28, 2011 while Gan was the sole defence witness.

Apart from Hafiz, the prosecution was represented by Munira Masood and Mohd Shafiq Azman.