I am a former employee of Muhibbah Engineering (M) Bhd (12737-K). During my tenure in the company, I discovered that the company submitted fraudulent invoices to multiple banks, among its 13 panel banks, for its Bankers Acceptance, BA, applications.
Evidenced in its 2020 annual report, total proceeds from BA's drawdown (bills payable's), 2020: RM1.2B & 2019: RM1.7B, of the company in both years are greater than corresponding years' revenue and cost of sales, 2020: RM0.7B & 2019: RM1.0B, exceeding by RM1.2 billion. As the notion of BA is financing trade transactions, that financed amount during the year is significantly greater than total trade transactions (both sales & purchases) amount warrants serious scrutiny into this matter.
I understand that overlapping might not have occurred in purchase BA applications, because bank disbursements are made directly to suppliers. But, fraudulent invoices are often requested by the company's account department, with my involvement in getting vendors’ cooperation in doctoring billed items of invoices to match banks’ requirement: material in nature. Moreover, most, if not all, invoices date is manually typed or stamped by the department on the same day of application. Confronted by vendors, the company's management responded that those practises are not illegal and reasoned on a flawed logic that the parent company's bank facility is utilised by a fully owned subsidiary. However, deliberately submitting an fraudulent invoice for trade financing, whose stated information is not accounted for in the borrower's book and used by the bank as basis for lending approval, is utterly wrong.
Stakes are even greater in sales BA applications, in which individual bank lacks visibility into another bank's BA applications of which the company applied simultaneously with fraudulent or genuine invoices, the banks ought to preempt further compounding of such overlapping, fraudulent lending. I have informal inside its account department telling me the incidents of overlapping sales BA applications. Requesting the company's auditor to provide segregated BA proceeds from drawdown, into sales and purchases, is the most straightforward way to discover that total amount of sales BA application by the company is higher than its group external revenue, excluding FFB's, confirming overlapping submissions while assuming that logic of its management is plausible.
To compensate on financial loss, Muhibbah's shareholders are advised to contact minority shareholder watchgroup at https://www.mswg.org.my/ to file a case lawsuits against its directors who are liable under law for fraudulent conducts.
Stock: [MUHIBAH]: MUHIBBAH ENGINEERING (M) BHD
2021-08-08 02:03 | Report Abuse
Bank Fraud by Muhibbah Engineering
I am a former employee of Muhibbah Engineering (M) Bhd (12737-K). During my tenure in the company, I discovered that the company submitted fraudulent invoices to multiple banks, among its 13 panel banks, for its Bankers Acceptance, BA, applications.
Evidenced in its 2020 annual report, total proceeds from BA's drawdown (bills payable's), 2020: RM1.2B & 2019: RM1.7B, of the company in both years are greater than corresponding years' revenue and cost of sales, 2020: RM0.7B & 2019: RM1.0B, exceeding by RM1.2 billion. As the notion of BA is financing trade transactions, that financed amount during the year is significantly greater than total trade transactions (both sales & purchases) amount warrants serious scrutiny into this matter.
I understand that overlapping might not have occurred in purchase BA applications, because bank disbursements are made directly to suppliers. But, fraudulent invoices are often requested by the company's account department, with my involvement in getting vendors’ cooperation in doctoring billed items of invoices to match banks’ requirement: material in nature. Moreover, most, if not all, invoices date is manually typed or stamped by the department on the same day of application. Confronted by vendors, the company's management responded that those practises are not illegal and reasoned on a flawed logic that the parent company's bank facility is utilised by a fully owned subsidiary. However, deliberately submitting an fraudulent invoice for trade financing, whose stated information is not accounted for in the borrower's book and used by the bank as basis for lending approval, is utterly wrong.
Stakes are even greater in sales BA applications, in which individual bank lacks visibility into another bank's BA applications of which the company applied simultaneously with fraudulent or genuine invoices, the banks ought to preempt further compounding of such overlapping, fraudulent lending. I have informal inside its account department telling me the incidents of overlapping sales BA applications. Requesting the company's auditor to provide segregated BA proceeds from drawdown, into sales and purchases, is the most straightforward way to discover that total amount of sales BA application by the company is higher than its group external revenue, excluding FFB's, confirming overlapping submissions while assuming that logic of its management is plausible.
To compensate on financial loss, Muhibbah's shareholders are advised to contact minority shareholder watchgroup at https://www.mswg.org.my/ to file a case lawsuits against its directors who are liable under law for fraudulent conducts.
c.c. : banks' compliance teams, minority shareholder watchgroup, crowe horwath