SC asks Talam to reissue financial statements
04/10/2007 The Star By Chan Ching Thut

KUALA LUMPUR: The Securities Commission (SC) has directed Talam Corp Bhd to reissue its financial statements for 2006 and 2007 by Oct 31.

The SC said the property developer had breached Regulation 4 of the Securities Industry (Compliance with Approved Accounting Standards) Regulation 1999.

“Talam’s breach of Regulation 4 involves the adjustments of various transactions in its financial statement for the year ended Jan 31, 2006 despite its auditors, Ernst & Young’s, inability to obtain sufficient appropriate audit evidence to satisfy themselves of the said adjustments.

“The adjustments had the effect of reclassifying RM90mil of its debtors into property development costs, other liabilities and retained profits brought forward,” the SC said in a statement yesterday.

Such treatment, the commission added, was not in compliance with the Financial Reporting Standard (FRS) 101 on Presentation of Financial Statements, which required financial statements to present fairly the financial position, financial performance and cash flows of an enterprise.

In this respect, it has directed Talam to reinstate the RM90mil and reissue its 2006 and 2007 financial statements.

“Talam is also required to announce to Bursa Malaysia in respect of the rectification of its 2006 and 2007 financial statements, together with the reasons and effects (financial or otherwise) of its actions,” it added.

StarBiz understands that Talam’s board of directors would call for an emergency meeting today to decide how to comply with the SC directive.

It is also learnt the company would seek further clarification from the SC on the directive.

Talam recently announced several changes to its board, which numbered six in its 2007 annual report.

In separate filings with Bursa, the company said chief executive officer Puan Sri Thong Nyok Choo and non-executive directors Sulaiman Hew Abdullah and Lai Moo Chan had resigned on Oct 1.

On the same day, it redesignated Datuk Ab Rauf Yusoh as executive director and appointed Chua Kim Lan executive director. Also appointed were three non-executive directors Datuk Kamaruddin Mat Desa, Lee Swee Seng and Loy Boon Chen.

The existing board members are executive chairman Tan Sri Chan Ah Chye, deputy vice-chairman Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj and non-executive director Tsen Keng Yam.

Shares in Talam, which fell to 19 sen on Oct 1 from 36.5 sen on Sept 26, had been rising on heavy trading over the last two days. The stock put on two sen to 26.5 sen yesterday on volume of 26.5 million shares.

On Tuesday, Talam announced that Bursa had deferred the suspension of its shares from trading today to give the company more time to submit an appeal to the SC on its proposed restructuring plan as well as a revised proposal.

The SC also directed Talam to comply with all regulatory requirements, including tabling its financial statements at a shareholder meeting and to re-lodge the financial statements along with the minutes of the meeting with Companies Commission of Malaysia within 14 days from the date the rectified and reissued financial statements were submitted to the SC and Bursa Malaysia.

The directive to Talam to reissue its accounts is the SC's third such order after Aktif Lifestyle Corp Bhd was asked to do the same on May 4, 2005 and Oilcorp Bhd on March 24, 2005.