‘Law constitutional in Transmile false financial statement case’

KUALA LUMPUR: The Federal Court ruled yesterday that Section 122(1) of the Securities Industry Act 1983 (SIA) is constitutional and did not violate the Federal Constitution.

In June 2011, former Transmile Group Bhd chief executive officer Gan Boon Aun made an application to the High Court to refer a constitutional question on the validity of section 122(1) of the SIA, arguing that the provision was inconsistent with Article 5(1) of the Federal Constitution.

Last year, the High Court referred the constitutional questions to the Federal Court for determination.

Federal Court Justice Tan Sri Jeffrey Tan Kok Wha, in delivering the apex court’s landmark decision, held the provision to be valid and ordered the matter to be remitted to the Sessions Court for continuation of the trial.

Gan was charged by the Securities Commission Malaysia (SC) in 2007 for abetting Transmile in making false financial statement relating to the company’s revenue that was likely to induce the purchase of its shares.

He was charged in the alternative with having furnished a misleading statement to Bursa Malaysia Securities Bhd in the same financial statement.

Gan was called to enter his defence on the alternative charge after the close of the prosecution case.

If convicted, Gan could face a minimum fine of RM1 million or imprisonment of up to 10 years, or both.

Transmile Group previous investors included tycoon Robert Kuok and Pos Malaysia Bhd.

Former transport minister Tun Dr Ling Liong Sik was also previously a Transmile chairman.

The company appeared in the SC’s radar after it was revealed that its impressive results were due to massive accounting irregularities.