Kuala Lumpur, 25 February 2010
Former directors of MEMS convicted over submission of misleading financial statements
The Kuala Lumpur Sessions Court today convicted Ooi Boon Leong and Tan Yeow Teck for knowingly authorizing the furnishing of a misleading statement by MEMS Technology Berhad (MEMS), a company listed on the then MESDAQ market, to Bursa Malaysia Securities Berhad (Bursa).
Ooi Boon Leong, 48, a substantial shareholder and former director of MEMS together with Tan Yeow Teck, 48, who was at the material time an executive director and Chief Financial Officer of the company, pleaded guilty to the offence under section 122B (b) (bb) of the Securities Industry Act (SIA) 1983. The misleading statement was in relation to MEMS’ reported revenue of RM73.4 million which was contained in its unaudited Condensed Consolidated Income Statements for the twelve-month period ended 31 July 2007.
Both Ooi and Tan admitted in court that MEMS’ group revenue of RM73.4 million, as reported in the unaudited 2007 financial statements, contained a total of RM30 million worth of sales which were fictitious. These fictitious sales which were purportedly made to two multinational companies and one foreign company in China made up approximately 41% of MEMS’ revenue for the financial year ended 31 July 2007.
The Sessions Court sentenced each accused to a fine of RM300,000 (in default 2 years imprisonment) under Section 122B of the same Act.
The Securities Commission Malaysia (SC) had earlier sought a deterrent sentence in view of the fact that equity analysts had relied heavily on the misleading statement as a basis of recommending a “buy” on MEMS’ shares. Moreover, Ooi was a substantial shareholder who sought to have gained significantly from the misleading financial statements of MEMS. The SC urged the court to impose a custodial sentence on the basis of public interest as the company’s share price later fell substantially on the news that the financial results which were announced earlier were misleading.
The SC will be recommending to the Attorney General’s Chambers that an appeal be filed against the Sessions Court’s decision.
SECURITIES COMMISSION MALAYSIA