| In
this article, we show you an example of how unscrupulous
persons or directors can siphon off money from a company.
While uncommon, schemes and scams can be concocted if
directors or substantial shareholders of a company have
intentions of stripping the company’s assets for
their personal gain.
The
following example will show how a director enriched
himself by using a joint-venture and creative accounting
to cover up a scam.
The
scam……….
Mr X (the perpetrator of this scheme) was looking for
a public-listed company (PLC) whose assets he could strip
off for his personal wealth. He schemed to position himself
as the managing director of a PLC, thus giving him a free
hand to make corporate decisions in relation to the company’s
assets and business dealings. At that time, there were
many substantial shareholders of PLCs wanting to dispose
their shareholdings due to a sluggish market where share
prices were really low and the economy was weaker than
normal.
This
situation presented an opportunity for Mr X to enter
a PLC as a substantial shareholder or director. What
he did was to buy a private company, Q Sdn Bhd, which
was a major shareholder of PLC A. Due to his substantial
shareholding in PLC A, he was appointed the managing
director and took control of decisions pertaining to
the company’s projects, assets and acted as the
signatory for the company’s cheques and dealings.
As
PLC A required two persons to act as signatories for
the company’s cheques, Mr X appointed his good
friend, Mr Y to be the independent director of PLC A.
Immediately after Mr Y joined the PLC, both of them
signed three cheques amounting to RM45 million and transfered
the money out of the PLC to various companies connected
to them. On the payment vouchers, only the names of
the payee were disclosed but not the purpose of the
payment.
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