©Business Times
(Used by permission)
by Kang Siew Li
TRANSMILE Group Bhd's founder and chief executive officer, Gan Boon Aun, has
relinquished his post following the recent disclosure of a string of
irregularities in the company's accounts.
In a filing to Bursa Malaysia yesterday, the air cargo firm said Gan has
voluntarily resigned with immediate effect.
Transmile also said that its board of directors has lodged a report with the
police and the Securities Commission over the false statements and documents in
relation to its revenue, property, plant and equipment and payments to third
parties as reported by Moores Rowland Risk Management Sdn Bhd.
The decision was made following deliberations and advice from its legal counsel.
In addition, Transmile will appoint a new representative on the board of CEN Sdn
Bhd, which is a 37.5 per cent–associated company. It will also nominate a new
representative on the board of CEN Worldwide Sdn Bhd, a wholly–owned subsidiary
of CEN.
"The company will (also) propose to the board of directors of CEN Worldwide that
PriceWaterhouseCoopers 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, trade
debtors and trade creditors," said Transmile.
Transmile added that Moores Rowland will carry out a special audit covering
areas including possible under–billing and non–billing of genuine sales between
Transmile Air Services Sdn Bhd and CEN Worldwide.
Yesterday's announcement was seen as the first and crucial step by Transmile
towards restoring confidence among its shareholders and investors.
The firm has remained silent on whether it will take action against those
responsible since it told Bursa Malaysia on May 7 that its audit could not be
finalised due to the absence of some documents.
Meanwhile, shares of Transmile dived 17.4 per cent to a three–year low when they
resumed trading yesterday. Trading has been halted at the company's request
since Friday.
The stock has fallen some 60 per cent so far this year.
It dropped to its lowest intra–day level of RM5.45 before closing 13 per cent or
85 sen lower at RM5.75.
Analysts expect the share price to continue falling to as low as RM2.80,
following the accounting adjustments as well as the uncertainty that continues
to pile on the stock.
Based on the special audit by Moores Rowland, Transmile would post pre–tax
losses, not profits, in fiscal years 2005 and 2006, and see a much smaller
profit in fiscal year 2004.
Shares of Pos Malaysia & Services Holdings Bhd, which has a 15 per cent stake in
Transmile, meanwhile, closed down 4 sen at RM4.20 yesterday.
MIMB Investment Bank Bhd said based on traditional valuation multiples
applicable to Transmile, the share price cannot be more than between RM2.60 and
RM2.80, lesser still if the losses are ineligible for tax relief.