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Backdating company's annual accounts and pretended to sign in front of Commissioners for Oaths

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asked on Dec 26, 2020 at 23:32
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edited on May 30, 2021 at 05:04
 
A business partner who holds the majority shareholding in a Sdn Bhd Company has handed in the annual accounts of the company with a majority of directors without the involvement of the director representing the minority (and thereby ignoring the shareholders agreement). His intention is likely to hide transfers he made (in collaboration with the managing director) to his own holding company. 

While handing in the annual accounts the director (and an employee director) backdated their signature to a time that the accounts had not actually been completed. This backdating of the annual accounts was confirmed by the auditor. The accounts were only ready months later.

Furthermore the document states that the signature has been conducted in front of a Commissioner for Oaths. This signature in front of the Commissioner for Oath was only possible at the stated date, not at the time it was actually signed as the person was not in Malaysia thereafter. Therefore the annual accounts were not signed in front of the Commissioner for Oath as stated on the document handed in with the government. 

Three questions:

1. Who to report to (especially when abroad)? Securities Commission? 

2. What are likely consequences for the involved parties? (For the “forging” of the document) 

3. What are the consequences for the company? 

Thank you for your help.
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3 Answers

answered on Dec 27, 2020 at 11:52
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edited May 30, 2021 at 04:50
 
Questions:

1. How many years this Sdn. Bhd has been in operation? Any profits declared to Inland Revenue Department?

2. What is the Authorised Capital, Issued Share Capital or Paid-Up Share Capital?
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answered on Dec 28, 2020 at 00:54
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edited Dec 28, 2020 at 00:55
by   AhmedS
Thank you for your questions. 

Should be in operations for about 8-10 years and reported profits in the past but 2019 reported losses.

Share Capital ist around 600-700k MYR

Thank you for your help. 
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answered on Dec 28, 2020 at 10:26
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edited May 30, 2021 at 04:56
 
@AhmedS

My comment is based on scratching the surface of company laws.

1. The last audited accounts is in 2019 (this year), personally I see no issues in late or backdated submissions on late acounts and you should have a latest set. (or you are actually asking for somebody else). Your answer on "share capital" may not be accurate as these 3 terms can be different from each other in most companies.

2. 1. Who to report to (especially when abroad)? Securities Commission? 
a) Suruhanjaya Syarikat Malaysia (SSM) for Sdn. Bhd.
b) Securities Commission for Bhd.
The reports must be made personally inside Malaysia and swear by Oaths.

2. What are likely consequences for the involved parties? (For the “forging” of the document) 
How can you say it is "forgery" when all relevant parties have attested the filing of the Audited Accounts? For proven "forgery", it is jail term and/or plus heavy fines. For rich directors, like yourself, who is often overseas, most filings are pre-signed and held by the auditors and/or cum company secretary. It could be an accepted industry practice for pre-signing of accounts.

4. 3. What are the consequences for the company? 
Suspension of business activities until the investigation is over which can take months or years. During this pandemic period, may cause the company to collapse overnight due to the nature of the business. Thousands of businesses have already collapsed now.

Be mindful of what you may decide to embark on. If something "big" happens like your reported case is thrown out of a case file in Court, due to lack of critical evidence, you can be counter sued by the directors, shareholder, auditors as well as the company secretary and Commissioner of Oaths.

(Caveat: The above comments is written by a Q&A registered User. It represents a personal point of view only and not be regarded as legal advice.)
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