| In
short, he managed to cook the books of PLC A.
Table 1 illustrates how the director managed to settle
his initial profit guarantee by using accounting entries.
Table
1:
| |
Event |
Accounting
entry |
Amount
(RM) |
| Initially |
The
shortfall of the director’s profit guarantee
|
Due
from director, Mr A……..(x) |
10
million |
| Subsequently |
Director
advanced money from own pocket to PLC A |
Due
to director, Mr A………(y) |
15 million |
| Finally
|
Contra
entry i.e. debit y and credit x |
Net
due to director, Mr A (the difference between x
and y) |
5
million |
The
result — instead of paying PLC A the RM10 million
shortfall in profit guarantee, the director managed
to siphon off RM5 million from the company.
Serious
breach of the law
This story is an example of breaching section 87A (use
of manipulative devices to defraud a company) and 122B
(false reports to the SC) of the Securities Industry
Act 1983. In addition, the director is also in
breach of his fiduciary duties and has committed a criminal
breach of trust (CBT) by making a personal gain at the
expense of the company.
While
authorities can take action against such crooks, investors
need to play their part too. Get educated. Learn how
to read a company's annual report and its financial
statements.
If
you suspect irregularities, exercise your rights to
voice your opinions and question the board of directors
on the questionable transactions. Do not hesitate to
lodge a complaint with the relevant authorities —
Securities Commission (Complaints Unit — Tel:
03-6204 8999 or e-mail: aduan@seccom.com.my),
Suruhanjaya Syarikat Malaysia (Tel: 03-4043 3366 or
e-mail tanya@ssm.gov.my)
or Polis Diraja Malaysia (Bahagian Siasatan Jenayah
Perdagangan — Tel: 03-2693 0245
|
