Malaysia’s securities watchdog said Friday it raided the offices of major cargo carrier Transmile earlier this week to probe accounting irregularities. The Securities Commission said in a statement that it entered Transmile premises as it “is investigating Transmile for possible irregularities in their accounts.”
Transmile, which has a swathe of prominent investors, said earlier this month it had failed to meet the deadline to submit audited financial statements for 2006. The announcement shocked investors, and Transmile shares have since fallen sharply, losing 31.5 percent from 13.00 ringgit before its announcement, to close Friday at 8.90 ringgit. Transmile’s shareholders include Malaysia’s richest man Robert Kuok, JP Morgan, Goldman Sachs, the Singapore government and national postal company Pos Malaysia. The company’s chairman is is former MCA (a component party of the ruling government) president and transport minister Ling Liong Sik.
The cargo firm told the Malaysian bourse on May 7 that the audit could not be finalised due to the absence of “relevant supporting documentation from the management on certain transactions.” The transactions concerned its trade receivables and related sales, and additions to its property, plant and equipment assets. The company also appointed a risk management firm to conduct a special audit and said it it would try to finalise its financial statements for its annual shareholders meeting in the second half of June.
Such a raid should be welcomed as it will project both transparency and protection of minority shareholders But why took so long to conduct the raid? If there’re something fishy about the accounting data since it was announced earlier, why not raid the office then? Why give time for the irresponsible people (assuming there are) to do some cover-up? Act promptly and carry your jobs efficiently and I’m pretty sure foreign investors would be glad to pour their money in. However don’t just stop there, go on and raid whichever listed companies which have bad record in terms of accounting report. Don’t forget about the external accounting firm which approved and possibly involved in the whole process. We do not want another Enron case to happen, do we? And please do not be selective when conducting such investigation or raid.