Transmile CEO quits

Wednesday June 20, 2007

By KATHY FONG

PETALING JAYA: Gan Boon Aun has resigned as chief executive officer of beleaguered Transmile Group Bhd as the fallout from the accounting irregularities will now lead to a police investigation.

In a statement to Bursa Malaysia, Transmile said a police report had been lodged over false statements and documents on revenue, property, plant and equipment and payments to third parties as reported by Moores Rowland Risk Management Sdn Bhd in a special audit.

Additionally, Transmile wants to put its representative in associate company CEN Sdn Bhd and nominate a new representative to the board of CEN Worldwide Sdn Bhd, a wholly owned subsidiary of CEN.

Transmile, which had deliberated the latest findings of Moores Rowland, also has lodged a report with the Securities Commission over the mis-statements in revenue, plant and equipment.

The special audit report revealed that revenues generated from invoices purportedly issued to some 20 companies were recorded as trade receivables. Subsequently, the trade receivables were reduced primarily with payments for “purported purchase of property, plant and equipment” and purported cash receipts.

The report said there were no documents to support payments of RM341mil made for the purchase of property, plant and equipment.

Transmile said it “will propose to the board of directors of CEN Worldwide that PriceWaterhouse-Coopers be appointed to carry out a special audit on CEN Worldwide.”

The special audit review is expected to cover areas including transactions between CEN Worldwide and its customers and suppliers, cashflows, sales, and trade debtors and creditors.

“The company will also be appointing Moores Rowland to carry out a special audit review covering areas including possible under-billing and non-billing of genuine sales between Transmile Air Services Sdn Bhd and CEN Worldwide,” the statement said.

Major shareholders of CEN are Transmile (37.5%), Pos Malaysia & Services Holdings Bhd (42.5%) and Konsortium Logistik Bhd (20%), according to their latest annual reports.

The final report of the special audit on Transmile highlighted that sales to CEN Worldwide since 2004 totalled RM604mil. The company has been making losses since 2004 and it owes Transmile RM103mil.

The Transmile board said Gan had yesterday “voluntarily relinquished all executive functions within the Transmile group of companies”.

Gan, the founder of Transmile, is largely credited for leading Transmile to great heights. He listed Transmile on the second board in 1997. His first attempt to transfer the counter to the main board in 2000 failed when the application was rejected by the Securities Commission. Gan succeeded in his second attempt in 2002.

In 2004, Gan sold his stake in Transmile to the Kuok group and approached former Transport Minister Tun Dr Ling Liong Sik to be the group’s chairman.

in Malaysia , you can do your own sweet businesss and be wacky and at the end of the day, you just walk out the office door as if there isn't anything happen at all... come on all the rich and famous, come and do business in Malaysia, and as there is if a law in malaysia, that would be the money says it all