Transmile ex-CEO jailed and fined for furnishing misleading statement

Transmile Group Bhd founder and former CEO Gan Boon Aun, 59, in a trial that lasted for 10 years, has been found guilty by the Sessions Court for furnishing misleading financial statements to Bursa Malaysia in 2007.

Sessions Court judge Hasbullah Adam sentenced the 59-year-old to a RM2.5 mil fine and one day in jail  However, in the event that he is not able to pay the fine by August 28, he faces 18 months’ imprisonment.

The statements concerned Transmile’s financial statement in its quarterly 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. 

The Securities Commission (SC) said it will be recommending to the public prosecutor to appeal against the sentence. 

The judge found that Gan had 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 company CEO and executive director.

The SC alleged that Gan had overstated Transmile’s revenue to give the impression that the financial performance of the company 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 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. 

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