Sunday, October 30, 2011

Independent Directors Beware

In a significant prosecutorial and judicial milestone of sorts, two Independent Directors who were members of the Audit Committee of public-listed company, Transmile Group Berhad, were convicted for submitting a misleading statement on the company to Bursa Malaysia Securities Bhd.

KUALA LUMPUR, Oct 28 (Bernama) -- Two former non-executive directors of Transmile Group Bhd were sentenced to a year's jail and fined RM300,000, in default six months jail, each by the Sessions Court here today for submitting a misleading statement on the company to Bursa Malaysia Securities Bhd.

Judge Datuk Jagjit Singh Banth Singh made the decision after finding Chin Keem Feung, 46, and Shukri Sheikh Abdul Tawab, 47, guilty of the offence.

In the judgment, Jagjit Singh said Chin and Shukri had failed to raise reasonable doubts against the prosecution's case at the end of the defence case.

However, the court allowed a stay of the sentence pending an appeal at the High Court.

The court also allowed Chin and Shukri's application to pay their fine in installments, with the first payment of RM150,000 to be paid today and the balance before Nov 30.

Chin and Shukri were charged with knowingly authorising the making of a misleading statement in the company's annual quarterly report on its unaudited revenue for the financial year ending Dec 31, 2006.

They were charged with committing the offence at Bursa Malaysia Securities Berhad, Exchange Square, Bukit Kewangan here on Feb 15, 2007.

The offence, under Section 122B(b)(bb) of the Securities Industry Act 1983 (ACT 280), carries a fine not exceeding RM3 million or to imprisonment for a term not exceeding 10 years or to both.

Deputy public prosecutor Shanti Geoffrey and prosecuting officer Nor Rifhan Rozi appeared for the prosecution, while Chin and Shukri were represented by lawyers Mohd Firuz Jaffril and Tan Hock Chuan, respectively.