Megan: Are You Shocked By The Light Sentence For The Accounting Fraud Commited?

One of the worst chapter in our local stock market history was the accounting scandal in Megan Media. ( See Accounting Fraud and Megan Media )

On today's papers I am so disappointed to read the following.

• SC files appeal against 'light' sentence on Kok
  Published: 2009/08/22
  
  THE Securities Commission yesterday filed an appeal against the Kuala Lumpur Session Court's "light" sentence on Kok Hen Seng.
  
  Kok pleaded guilty for helping public-listed Megan Media Holdings Bhd submit false revenue figures of over RM1 billion in its 2006 accounts. He also admitted to three other outstanding charges. (Moolah: See.. when the danger in sales revenue growth? These figures can be cooked! )
  
  For the offences, the Session Court fined Kok, who was the personal assistant to MMHB executive chairman then, RM350,000 on August 18 to be paid the next day in default of a year's imprisonment.
  
  The SC had earlier urged the Sessions Court to mete out a deterrent sentence.
  
  In a statement yesterday, the SC said the fraud had a significant impact on MMHB's share price as it dropped 85 per cent over three months after the news of false statements became public.
  
  "Kok had played a key role in the creation of fictitious invoices to support the false revenue figures."
  
  Several financial institutions had also been deceived into giving trade facilities which were then used to resemble payments for fake sales, it added.

Only a rm 350,000 fine?????

OMIGOSH!!!!!

This is simply ludicrous!

Totally unaccecptable given what had happened!

Let's recall... sigh. Posted The Naked Truth in Megan in July 2007.

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Ok, Megan posted that Megan Media posts RM1.14b net loss in 4Q.

I have decided to have some fun in spotting the differences between yesterday's Quarterly rpt on consolidated results versus their previous quarterly earnings reported on March 2007.

I will state the current one first followed by the previous quarter.

1. Sales revenue. 21.417 million versus 306.150 million.

2. Property & plant. 101.939 million versus 588.601 million.

3. Investment in associate. Zero versus 67.502 million.

4. Inventories. 26.355 million versus 125.090 million.

5. Trade receivables. 13.601 million versus 430.354 million.

6. Other receivables,deposits and prepayments. 12.891 million versus 260.787 million.

7. Total assets. 163.441 million versus 1.511 billion!

8. Accumulated losses of 1.041 billion versus retained earnings of 262.545 million.

9. Total Equity-(Deficit) of 796.963 million versus total equity of 506.963 million.

10. Net Asset per share of -3.92 versus Net Asset per share of 2.50.

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Megan Media cooked up their whole book!

Everything!

Let me explain... If you look at the comparison figures as posted, for example, point 2 reads: "2. Property & plant. 101.939 million versus 588.601 million."

This meant that Megan told the investing public their property and plant was worth 588.601 million.

Actual fact was it's only worth some 101.939 million!

Everything on the left, represented the actual audited numbers, while the right showed how insanely high everything was cooked up!

In short, Sales revenue figures was artificially boosted, value of their property and plant, investment amount in associates, stock inventory, trade receivables and deposits, receivables and prepayments were all false!

Yeah, he admitted guilty in submitting false revenue figures of over RM1 billion in its 2006 accounts!

And the fine now? rm 350k????? ( see also Suit Filed Against 2 Megan Officials )

And what about the boss??? Yes what about that Mr. Yeo Wee Siong????!!!!!

Sigh!

Real sad day.