KUALA LUMPUR (Oct 8): The convictions of three former Kosmo Technology Industrial Bhd officials for furnishing false information to Bursa Malaysia Securities Bhd are not safe due to the prosecution's failure to verify if the computerised accounting system was in proper working order, a lawyer argued in the High Court.
Last year, Kosmo's former managing director Datuk Norhamzah Nordin and former director Mohd Azham Mohd Noor were each sentenced to pay a fine of RM1.45 million and to serve a two-year jail term for furnishing false statements in relation to Kosmo's revenue figures in its unaudited quarterly reports for 2006 and 2007.
The group's former accounts manager Helen Lim Hai Loon was, meanwhile, fined RM560,000 and ordered to serve a one-year jail term for abetting the two men in committing the offences.
All three were initially acquitted by the Sessions Court, but upon appeal by the Securities Commission Malaysia (SC), the High Court ordered them to enter into their defence and they were subsequently convicted by the Sessions Court.
The High Court today heard their appeal against the convictions and sentences.
Lawyer Datuk C Vignesh Kumar, who appeared with Daniel Annamalai for Norhamzah and Mohd Azham, said the prosecution had failed to verify whether the accounting system was in proper working order or to call any witness to ascertain the person who had inputted the data in the accounting system.
Vignesh Kumar noted that when the SC investigating officer was cross-examined, he admitted that their focus was on the financial records and not the computing system.
"The company's accounting system is fully computerised, and no one was called by the prosecution to testify as to who had inputted the data.
"Witnesses told the Sessions Court that they did not know who [had] inputted the data in the system," he said.
Vignesh Kumar said his clients cannot be faulted for the apparent false information by being directors of the company, considering they did not know where the false information came from.
The prosecution's failure to verify that the computerised accounting system was in proper working condition, and to produce a certificate verifying the system was in order, created doubts on the prosecution case, he argued.
The counsel also said the testimony by the company's chief financial officer (CFO) should not have been accepted by the court, as he was an interested party and wanted to shift the blame to the two former directors.
Vignesh Kumar further said that there was also conflicting evidence in favour of his clients and this was not taken into consideration by the Sessions Court when one of the prosecution witnesses told the court that Mohd Azham had never directed the witness to purchase shell companies.
He also said that each of the three subsidiary companies had their own accounts and the raw data would be consolidated and sent to the CFO, who would send it to the audit committee, and the board would then adopt the report.
"There [was] a statutory audit done on the company on an annual basis and this was done in 2006 and 2007," he said, alluding to the need for the accounts to be recognised.
Meanwhile, lawyer PG Cyril, appearing for Lim, said the Sessions Court had failed to address his client's involvement in the abetment charge in the written grounds.
He said as doubts were created on the convictions of the other two former directors, then the abetment charge on his client should also fall.
"There is no finding by the Sessions judge as to how my client had abetted with the first and third accused in the crime or whether she had conspired together with them in assisting the offence," Cyril said.
For these reasons, Vignesh Kumar and Cyril said their clients' convictions should be quashed and sentences set aside.
Meanwhile, deputy public prosecutors Shoba Venu Gobal and Hashley Tajudin told the court that the convictions and sentences are safe.
They said there was no need for the prosecution to prove the accounting system was in order, as based on case laws, when a computer system is found to be operating, it need not be verified.
Shoba said the Sessions Court also made a finding of fact that the defence witness' testimony could not be accepted by the court and hence, failed to create doubts on the case.
She further told the court that witnesses had verified the signatures of the accused on the documents and this should be accepted by the court.
Hashley further denied the defence's assertion that the Sessions Court's judgement was a cut and paste job, and showed various instances in the grounds of judgement that showed the court had made its own finding after weighing in on the evidence and conducting its own analysis.
Justice Datuk Muhammad Jamil Hussin set Nov 5 to deliver his decision.
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