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Megan Media Berhad had faced a serious finanicial downfall in the year of 2007. The company was discovered a serious corporate governance and accounting misleads. The incident may be a blessing in disguise as it could give regulations a freer hand in dealing with corporate fund.
Megan Media Berhad had faced a serious finanicial downfall in the year of 2007. The company was discovered a serious corporate governance and accounting misleads. The incident may be a blessing in disguise as it could give regulations a freer hand in dealing with corporate fund.
Megan Media Berhad had faced a serious finanicial downfall in the year of 2007. The company was discovered a serious corporate governance and accounting misleads. The incident may be a blessing in disguise as it could give regulations a freer hand in dealing with corporate fund.
Megan Media Berhad is a company that provides management consultancies.
The company engages in the manufacture sale and marketing of data
storage products such as computer diskettes ,video cassete tape, digital versatile recording and so on. The company also manufactures supplies and distributes consumer products. (Bloomberg, 2015) Megan Media Holdings Berhad had faced a serious finanicial downfall in the year of 2007. The company was discovered a serious corporate governance and accounting misleads. (Jaya S, 2007) Megan Media Berhad that was reported accounting fraud. Megan Media s auditor had cause a net loss of RM 1.14 billion. According to the unaudited results released on July 2, throughout the end of April 2007 the net loss was RM 1.6 billion. However, Megan MEDIA Holding Berhad wishes to reiterate that further to previous announcements, the investigation work into the fraud and irregularities still going on and as well is the companys current annual audit. (Moolah,2007). The investigation discovered that the payments to all trading creditors were actually made to other parties in a move to channel cash out of Memory Tech Sdn Bhd. (investlah,2013) Megan Media Behard announced accounting misstatements in its books, at first their trade receivables were inflated. The accounting fraud was at its subsidiary, Memory Tech Sdn Bhd. The trade receivable now is 13.061 million and net debts now is 597.607 million and the net liability per share now is 3,92 million. ( Moolah, 2007). Megan Media Berhad revealed fraudulent accounting and trading practices that could result in an asset shortfall of RM 456 million, its actual fixed asset value of RM 585 million was also in debt. ( Jaya S, 2007). Megan Media Berhad said that it would engage the creditor banks to formulate the debt restructuring scheme and regulations plan in ensuing weeks, and to also initiate legal action to recover the lost amount due to irregularities. (investlah,2013) However, the incident may be a blessing in disguise as it could give regulations a freer hand in dealing with corporate fund. It could help to force
listed companies to appoint directors and members of its audit committee
more on the basis of merit than reward. With that being said, Megans problems came to light after its 2 subsidiaries defaulted on debt causing creditor banks to force an investigation. Analyst said it had to do increasing pressure from the authorities. (Jaya S,2007) Megan Media Berhad announced that the state of solvency would ultimately depend on the outcome of the debt restricting and regularization endeavor. ( investlah, 2013) In my opinion, these issues should be taken seriously by all companies. In the first place Megan Media Berhad wasnt paying much attention to their account. Megan Meda Berhad wasnt careful and it led to accounting fraud. Megan Media Berhad Corporate advisors were so well treated that the auditors have become more than stringent. I personally think government should really take precautions on the new amendments to the companies act to burden the auditors more onerous government plays a major role in helping organizations/companies in reducing crisis if they are willing to take major actions and not just ignore the crisis faced by companies. Aside from that, Malaysia should really consider in enforcing stricter punishment such as mandatory jail terms for accounting frauds or suspicions of frauds. What we need is faster justice system and not for a delay of court cases just to settle an accounting fraud or a bankruptcy issues. We need our system to be consistent and effective. Jail time of 7 years or being fined a couple of millions doesnt work effectively anymore, auditors are immune from being sued for whistle-blowing (Jaya S, 2007)
References Jaya S (2007). BTS Msian Economy can take external shock. Berita Malaysia Moolah (2007). Megan Media Posts RM 1.148 Net loss in 4Q. whereiszemoda.blogspot.com Investlah(2013).The biggest corporate scandals. www.investlah.com