Patimas: will there be justice? (3)

I wrote first about Patimas, after giving a long list of alleged irregularities and red flags:

"Will the authorities take appropriate action within a reasonable timeframe? Time will tell."


In the next posting in which Bursa handed down fines of RM 2 Million in total to four executive directors I wrote:

"Is the punishment enough, will it act as a deterrent? I don't think so, I think only a jail sentence will suffice."


Now the Securities Commission revealed that it "charged a former Managing Director and three former executive directors of Patimas Computers Berhad (Patimas) with ten charges of causing wrongful loss to the company."

"Law Siew Ngoh, 55, a former Managing Director, Yap Wee Hin, 58, a former Deputy Executive Chairman, Robert Daniel Tan Kim Leng, 59, and Ng Back Heang, 62, both former executive directors of Patimas are said to have made payments totalling RM5.1 million between July to December 2010, for the purported development of various software for Patimas when in fact they were not used for such purpose."

"This is the first time the SC is taking a criminal action for an offence under section 317A(1) of the Capital Markets and Services Act 2007. Under this section, an officer of a listed corporation or any of its related corporation, commits an offence if he does anything or cause anyone to do anything with the intention of causing wrongful loss to the listed corporation or its related corporation. At the material time, the offence was punishable with an imprisonment term not exceeding ten years and a fine not exceeding RM10 million."

Patimas: will there be justice? (2)

I wrote before about Patimas. I ended the posting with the following:

"Will the authorities take appropriate action within a reasonable timeframe? Time will tell."

That question has been answered by Bursa, some snippets:


Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded Patimas Computers Berhad (PATIMAS) and its 4 executive directors at the material time for breaching the Bursa Malaysia Securities Main Market Listing Requirements (Main LR).  In addition, the 4 executive directors of PATIMAS were fined a total of RM1,986,200.

All the 4 executive directors had or should have knowledge of the financial affairs of PATIMAS including these transactions and were in a position or had the reasonable means to detect, ascertain, address and/or resolve the veracity of the transactions and the audit issues arising from the same.  This was particularly in light of the nature, irregularities and magnitude / materiality of the transactions and their position, roles and responsibilities in the Company (including as directors in the subsidiaries involved in these transactions) as well as their knowledge of and/or involvement in the transactions.


Is the punishment enough, will it act as a deterrent? I don't think so, I think only a jail sentence will suffice.

Jail sentences are rarely given in offences regarding listed companies in Malaysia, but we just saw one example where the Securities Commission indeed managed to get the former Managing Director of Pancaran Ikrab Berhad (PIB) jailed for six years, and fined RM1 million.

Patimas: will there be justice?

On March 21, 2014 Patimas Computers Bhd. was delisted from Bursa Malaysia.

An investigative audit by UHY Advisory has shown lots of very serious irregularities, just to mention a few:

 

Next to that there was a court case between Patimas and one of its business relations, Omni Quest, the judgement of which also contained lots of material:

Patimas was audited by Ernst & Young, this was their statement made on April 26, 2011 regarding the annual audited accounts of 2010:

Pretty scary, since the irregularities were going on for so long, and one of the top 4 accounting firms did not find anything wrong in the accounts.

Further more we see things that are normal in a company going under, for instance many director changes, from their 2013 audited accounts:

And the usual rumours start to appear, two instances where Bursa queried the company:

PATIMAS IS RUMOURED TO GET CONTRACT WORTH RM160 MILLION
AZIM ZABIDI IN TALKS WITH FOREIGN PARTY TO REVIVE PATIMAS

Rumours that must have played their part in supporting the share price and volume:

And insiders selling in a big way, when the troubles start to appear:

Will the authorities take appropriate action within a reasonable timeframe? Time will tell.