Tuesday, February 27, 2007

Multiple charges for Meda Inc Bhd directors!

My last post on 22nd Feb was an email from "A Friend" giving us a closer look at Meda Inc Bhd operations. We are told that the real power behind the whole thing is actually Teoh Seng Aun, who does not want to hold any directorships but have substantial shares in all the sister and brother companies. "A Friend" tells us that TeohSA (Teoh Seng Aun) is the one pulling the strings, the main man behind the whole setup.

"A Friend" also tells us that Meda Inc Bhd's so-called "profits" and sales turnover are in fact almost non-existent, because the Teoh brothers (owners) are the ones who buy up their own properties through shell companies, pay only 5% of purchase price, but register the sales as 100% on their books. This creates the illusion that Meda Inc Bhd is selling their properties well, when in fact, it is not true.

This kind of bullshit gives the wrong impression to investors who buy up their shares in the market, making their share price go higher than its true value. Kenneth Teoh and his brothers, all of whom hold large portions of shares, can then use the false market price to mortgage their shares for higher financing and credit lines.

We all know that many credit lines have been pulled back, because Meda Inc Bhd could not meet their regular payment requirements to the finance companies and banks. "A Friend" says this is why Meda Inc Bhd have no cash to pay suppliers. Only the directors/owners ae making themselves rich at the expense of suppliers and public shareholders.)

What are the implications for Kenneth Teoh, Teoh Seng Aun, others directors, and employees who are involved with these kind of undesirable activities, as mentioned by "A Friend"?

Let's look at all those people involved and what their crimes might be:


Directors such as Kenneth Teoh, Ong Bok Siong, Dr Patrick Teoh, and other members of the board will be guilty of:

1. Failure of carrying out their directors' duties;
2. Failure to act for the interest of the Company;
3. Fraudulent & false reporting;
4. Lying to the public about the real and true facts of the Company's business;
5. Defrauding the public shareholders;
6. Criminal breach of trust;
7. Criminal neglect of duties;
8. (Possibly) mis-use of company funds for private purposes;
9. (Possibly) illegal siphoning out of company funds.


Auditors are supposed to be professionals who uphold their integrity. They are supposed to do the right thing because the public place their trust in these people to report correctly and the truth. In the Meda Inc Bhd case, the auditors could be faced with:

1. Professional negligence (if they have not bothered to probe deeply);
2. Liability to compensate public losses for their failure to do their job professionally and competently;
3. Collusion with Meda Inc Bhd directors to defraud the public (if they knew what was going on);
4. Criminal breach of trust;
5. Incompetence (if they didn't know what's going on);
6. Accomplices in a crime.

There will also be other people indirectly involved, such as Acounts Managers and Financial Controllers. A lot of the illegal activities in a PLC like Meda Inc Bhd cannot be done without the knowledge of accounts clerks, managers and FCs (Financial Controllers). In some ways, our friends at this level are indirectly also helping their bosses and directors carry out illegal activities that defraud and mislead the public. Their own co-workers will also get a bad deal because all those talk about bonuses and "profit sharing" will be nothing more than empty promises. Employees in Meda Inc Bhd (and Summit Hotel USJ) will know what I am talking about: the management always promise this and that IF the performance is better, but those promises never come true.

Not only are the public shareholders and authorities being conned, the employees also are being conned by their management.

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