Feb 19 2007
Last Thursday, Mesdaq-listed NasionCom Holdings Berhad (KLSE: NSCOM, stock-code 0073) was publicly reprimanded by the Malaysia SC (Securities Commission) for submitting inflated revenue figure in its fiscal 2005 financial statements, and was told to re-issue the accounts within a month. NasionCom has told Bursa Malaysia that it will appeal against SC’s decision.
Deloitte KassimChan was auditor for NasionCom’s accounts that year, according to the company’s 2005 annual report. Back in August 2006, the SC reprimanded Deloitte KassimChan and Hwang-DBS Securities Bhd over Ocean Capital Bhd’s restructuring plan. The regulator found that the accounts of Pasaraya Hiong Kong, a key component in the revamp, contained overstated sales figure.
While we should applaud the action taken by SC, I’m equally amaze how the same auditor (Deloitte KassimChan) was given the easy exit and allowed to audit other listed companies when at the first case it already breached a serious offence on Ocean Capital Bhd’s restructuring plan.
I agreed with the Minority Shareholder Watchdog Group (MSWG) that submission of false information in producing inaccurate financial statements is a very serious offence because it affects not only the integrity of the market but also investor confidence. Obviously there’re something very wrong with either the system or execution with both cases involving the same auditor. I’m sure the auditor will continue to audit other companies as I’m drafting this article.
So, the question is: what will Malaysia authorities do to prevent completely such serious criminal from occuring again in future? I do not think the auditor should be allowed to practice auditing until a complete and transparent investigation has been carried out. But then this is Malaysia, a land where transparency is a rare commodity. How can you confidently invest in Malaysia stocks when you can’t be sure their profit and loss figures can be trusted? Does Malaysia needs an equally famous ENRON case before start working on ensuring public interest (stock investors) are protected? Please don’t forget to take a harsh action against the directors of NasionCom (including jail sentence) who are behind this number-cooking exercise. And I guess NasionCom is out from the race in securing the WIMAX license (don’t think they should deserve it even without this issue).
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February 19th, 2007 by financetwitter
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Comments
NasionCom should be banned from listing at all. Submitting the false report is not a mistake but a cheat. Think about those who have invested heavily based on the quarterly report, the lie is of grave consequences.Removal from the Bursa is best for the interest of all and be a lesson to others so that before they do any foolish things, think about the fate of NasionCom.
NasionCom should be banned from listing at all. Submitting the false report is not a mistake but a cheat. Think about those who have invested heavily based on the quarterly report, the lie is of grave consequences.
Removal from the Bursa is best for the interest of all and be a lesson to others so that before they do any foolish things, think about the fate of NasionCom.