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Malaysia: Scan Associates Bhd lodges police report against former CEO

Posted on: March 19, 2009


Bernama – Thursday, March 19

KUALA LUMPUR, March 18 (Bernama) — Scan Associates Bhd today lodged a police report pursuant to a formal report from the forensic auditor (FA) appointed by the company, Abu Bakar Rajudin (Corporate Governance Services) Sdn Bhd, to investigate the financial impact of a possible misappropriation of funds. 

In a filing with Bursa Malaysia, it said the formal report found that its former chief executive officer, Datuk Aminuddin Baki Esa was involved in manipulating revenue figures amounting to approximately RM6.800 million in 2005 and 2007 to mislead and defraud the board and shareholders about the company’s underlying performance. It said the FA had completed the investigative audit and submitted its report on March 2.

The critical findings of the report were that there was a manipulation of earnings to show a growth in revenue by issuing invoices (for projects which had not been implemented) to a partner company in Saudi Arabia amounting to approximately RM2.5 million in the financial year ended 2005 and taking the amount as revenue for that year.

A subsequent manipulation of earnings to show a growth in revenue recorded in the year 2007 where SCAN issued invoices to a partner in Syria amounting to approximately RM4.3 million for the purportedly Consultancy Services for the ICT Security Handbook of Syrian Arab Republic, it said.

The other finding was a business transaction with a supplier which did not involve the delivery of items but a payment of approximately RM1.7 million to the said supplier.

It said there were manipulated records of settlement of its trade receivable namely, the partner in Saudi Arabia, for an amount of approximately RM1.7 million whereby the settlement of the original invoice which was made through deduction of the commission earned by the partner in Saudi Arabia and by cash received from third party and the then Chief Executive Officer of the Company.

The financial impact of approximately RM5.86 million based on the said findings will be reflected as a prior year adjustments in the unaudited quarterly financial report for the fourth quarter ended Dec 31, 2008, it said.– BERNAMA

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