Found guilty

The Kuala Lumpur Sessions Court found two former independent directors of
Transmile Group Berhad guilty under section 122B(b)(bb) of the Securities Industry
Act 1983, for having authorized the furnishing of a misleading statement to Bursa
Malaysia in Transmiles Quarterly Report on Unaudited Consolidated Results for the
Financial Year Ended 31 December 2006.
The misleading statement was with respect to the unaudited revenue figures which
were reported to the stock exchange for both the 4th quarter of 2006 as well as the
cumulative period for 2006.
The directors, Jimmy Chin Kim Feung and Shukri Sheikh Abdul Tawab, were at the
material time, in February 2007, members of the Audit Committee (AC) of Transmile
and members of Transmiles Board of Directors. They were charged in 2007 and
claimed trial. The trial commenced in 2010 and the Prosecution called 11 witnesses
to prove the charge against both accused. Both accused gave sworn evidence in
their defence.
In passing the sentence of one year imprisonment and a fine of RM300,000 (in
default six months imprisonment), the Sessions Court Judge, Justice Dato Jagjit
Singh Bant Singh stated that the public interest factor must be given paramount
consideration. He said that the Audit Committee is a vital organ of the company and
particularly important in the corporate governance of a company.
The judge emphasised that the AC has specific duties, functions and responsibilities
and that the investing public rely on them very much. He said that in this case the
evidence showed a blatant disregard of the seriousness of the concerns on the
contra transactions when the AC was told by Deloitte that the contra transactions
were very unusual and lacked commercial justification. These, he said, were
sufficient warning bells and as AC members they should have raised these issues to
the board but instead failed to do so.
The case against two other former directors of Transmile Group namely Gan Boon
Aun and Khiudin bin Mohammed, who were executive directors of Transmile at the
material time, is currently pending in the Kuala Lumpur Sessions Court. The charges
brought by the SC against Gan and Khiudin were also with respect to misleading
statements made in the same quarterly statement which was submitted by
Transmile to Bursa Malaysia in February 2007. Both accused had, on 22 March 2011,
been called to enter their defence after the close of the prosecution case.