This article first appeared in The Edge Financial Daily on March 12, 2019
KUALA LUMPUR: Former transport minister Tun Dr Ling Liong Sik has failed in his bid to set aside a subpoena requiring him to testify in the long-drawn corporate fraud case involving Transmile Group Bhd, where he was chairman.
Sessions Court Judge Hasbullah Adam yesterday dismissed Dr Ling’s application to avoid testifying about what is dubbed as Malaysia’s Enron scandal, saying the ex-minister’s application had “no merit”.
Deputy public prosecutor Mohd Hafiz Mohd Yusof told reporters later that the Transmile case hearing is scheduled to continue on April 10, with further cross-examination of the accused, Transmile founder and former chief executive officer Gan Boon Aun.
Mohd Hafiz said for now, it is uncertain when Dr Ling will be called to take the witness stand. “As of today (yesterday), he is the only witness that they (the defence) want to call. We only know of Gan Boon Aun’s intention to call Dr Ling and that’s about it,” he said.
Dr Ling’s lawyer, Ranjit Singh, declined to state the reason cited by his client in his application to set aside the subpoena to attend court. Gan’s lawyer, Datuk Tan Hock Chuan, refused to speak to the media.
Gan was charged under the Securities Industry Act 1983 by the Securities Commission Malaysia in 2007 for furnishing misleading financial information.
This happened soon after it was revealed that Transmile’s stellar earnings for financial years ended Dec 31, 2004 (FY04) to FY06 were actually due to massive accounting irregularities. This was revealed when the auditor Deloitte & Touche refused to sign off the final accounts because it was doubtful of Transmile’s receivables.
Transmile’s board then appointed Moores Rowland Risk Management to conduct a special audit, uncovering huge discrepancies in the receivables, with the auditor concluding the earnings for FY05 and FY06 were grossly overstated.
According to the audit, Transmile suffered losses of RM126.3 million instead of a RM157.5 million profit in FY06 as reported. In FY05, it chalked up losses totalling RM369.6 million instead of an RM84.4 million profit that was reported.
In 2010, Transmile slipped into the Practice Note 17 category before it was suspended and delisted the following year.
Apart from Dr Ling — also a former MCA president — being its chairman, tycoon Robert Kuok Hock Nien was notably among Transmile’s investors. The Kuok Group bought a 28.5% stake in the company in 2004.
Dr Ling, joining Transmile in April 2004, vacated the chairman’s post two days before the group’s annual general meeting on Sept 5, 2007. Before his resignation, Gan, then executive director Khiudin Mohamed and chief financial controller Lok Chok Ping also quit their positions.