Kuala Lumpur, 2 March 2010
Former Granasia Corp MD convicted over false IPO statements

The Kuala Lumpur Sessions Court has convicted Chan Kok Suan, the former Managing Director of Granasia Corporation Berhad (GCB), for submitting false statements to the Securities Commission Malaysia (SC) as part of the application for an Initial Public Offering (IPO). Chan was convicted yesterday under section 32B(4) of the Securities Commission Act (SCA) and imposed with a fine of RM500,000 in default, 10 months imprisonment.

Chan 45, pleaded guilty to the charge under section 32B(1)(c)(aa) read together with section 138(2) of the SCA, as a director of the company which had provided false information to the SC in Foowood International Sdn Bhd’s (FISB) Reports and Financial Statements for the year ended 31 December 2002. In the proposal to the SC, FISB’s shares were to be acquired by GCB as part of the proposed listing exercise.

The false statements were in relation to an over-statement of RM27.36 million of FISB Group’s revenue and an after-tax profit of RM7.4 million.

The SC urged the court to impose a deterrent sentence as the false information had resulted in the SC being misled into approving the listing proposal based on the inflated revenue and profit figures.

While the listing did not materialize in this case, the SC stressed that Chan had known of the false figures at the time the information was submitted to the SC and that this was a serious breach of the law. The SC urges directors who attest to the accuracy of information submitted to the SC, for purposes of listing, to take their obligations under the law very seriously as the veracity of such information is critical to the process of fund raising.