This article first appeared in The Edge Financial Daily on June 19, 2019

KUALA LUMPUR: Court proceedings of the infamous accounting scandal in Transmile Group Bhd resumed yesterday.

Gan Boon Aun (pic), the founder and former chief executive officer (CEO) of the air cargo operator, who was charged for furnishing misleading financial information back in 2006, was cross-examined by the prosecution team in the Sessions Court yesterday.

Gan claimed that he did not have enough time to stop the release of the financial results for the financial year ended Dec 31, 2006 (FY06) and the then external auditor Deloitte & Touche (D&T) did not alert him that it was not appropriate to release the set of financial accounts during a meeting.

In the meeting with the external auditor on Feb 15, 2007, which was the day the “overstated” financial earnings were filed with the stock exchange, Gan said they did not talk much about the documentation of the financial results, but merely had casual conversations about the company’s other projects.

However, when deputy public prosecutor Mohd Hafiz Mohd Yusof asked if Gan would have stopped the release of the FY06 financial results on Feb 15, 2007 had he met the auditor earlier, the question was objected to by defence counsel Datuk Tan Hock Chuan on the ground that the question was hypothetical and speculative.

Gan’s appearance in court yesterday came after the judge ruled that there was a prima facie case against him.

The accounting scandal, which involves inflated revenue and fake sales invoices, is touted to be Malaysia’s very own Enron scandal.

Transmile, in which tycoon Robert Kuok Hock Nien owned a majority stake, reported stellar earnings for FY06 when in fact it was actually due to massive accounting irregularities. This was revealed when the auditor, D&T, refused to sign off the final accounts because it was doubtful of Transmile’s receivables.

Judge Hasbullah Adam adjourned the proceedings until today, and which will continue tomorrow.

Former transport minister Tun Dr Ling Lion Sik, who was also the chairman of Transmile, is expected to take the witness stand after Gan.

Ling had failed in his bid to set aside a subpoena requiring him to testify in court with regard to the accounting irregularities in Transmile.

He is the only witness the defence wants to call.