Transmile, DHL Partner in Malasia, involved in accounting scandal

Malaysian cargo airline Transmile, a key DHL Express partner for inner-Asian and transpacific routes, has been hit by an accounting scandal that has forced the resignation of its chief executive.

Transmile Group Bhd’s founder and chief executive officer, Gan Boon Aun, has relinquished his post following the recent disclosure of a string of irregularities in the company’s accounts.

In a filing to Bursa Malaysia yesterday, the air cargo firm said Gan has voluntarily resigned with immediate effect.

Transmile also said that its board of directors has lodged a report with the police and the Securities Commission over the false statements and documents in relation to its revenue, property, plant and equipment and payments to third parties as reported by Moores Rowland Risk Management Sdn Bhd.

In addition, Transmile will appoint a new representative on the board of CEN Sdn Bhd, which is a 37.5 per cent-associated company. It will also nominate a new representative on the board of CEN Worldwide Sdn Bhd, a wholly-owned subsidiary of CEN.

Transmile added that Moores Rowland will carry out a special audit covering areas including possible under-billing and non-billing of genuine sales between Transmile Air Services Sdn Bhd and CEN Worldwide.

The firm has remained silent on whether it will take action against those responsible since it told Bursa Malaysia on May 7 that its audit could not be finalised due to the absence of some documents.

Meanwhile, shares of Transmile dived 17.4 per cent to a three-year low when they resumed trading yesterday. Trading has been halted at the company’s request since Friday. The stock has fallen some 60 per cent so far this year.

Based on the special audit by Moores Rowland, Transmile would post pre-tax losses, not profits, in fiscal years 2005 and 2006, and see a much smaller profit in fiscal year 2004.