GBH had breached Financial Reporting Standard (FRS) 127, Consolidated Financial Statements and Investments in Subsidiaries (previously MASB 11) where it failed to duly eliminate profits arising from its intra-group sale of properties

SC reprimands Goh Ban Huat and its board of directors; key directors fined for financial reporting deficiencies The Securities Commission (SC) today publicly reprimanded Goh Ban Huat Berhad (GBH) and its Board of Directors and has imposed a fine of RM50,000 each against its Managing Director, Goh Tai He and Executive Director, Tan Ah Cheun. The public reprimand and the fine are in relation to the failure of the company and its directors’ to comply with Regulation 4 of the Securities Industry (Compliance with Approved Accounting Standards) Regulation 1999 (Regulations) in respect of GBH’s financial statements for the quarter ended 31 December 2004. Regulation 4 principally requires every listed corporation, its directors and chief executive to ensure that the consolidated financial statements are to be made out in accordance with approved accounting standards. The breach GBH had breached Financial Reporting Standard (FRS) 127, Consolidated Financial Statements and Investments in Subsidiaries (previously MASB 11) where it failed to duly eliminate profits arising from its intra-group sale of properties, resulting in an overstatement of profits by RM121 million in GBH’s financial statements for the quarter ended 31 December 2004. Under FRS 127, intra-group transactions and the resulting profits should be eliminated in full. Other considerations The erroneous profit before taxation of RM100 million announced by GBH in its 31 December 2004 quarterly results on 28 February 2005 had subsequently prompted unusual share price movements and dealings of GBH shares on Bursa Malaysia Securities Berhad. The SC noted that GBH had explained and rectified the error in the quarterly results through its announcement on 7 March 2005 where a loss before taxation of RM21 million was reported instead. Notwithstanding this, the SC views the breach as serious since it involves a fundamental accounting issue. Conclusion The SC reminds all other listed corporations, their directors and chief executive officers on the importance of adhering to all relevant financial reporting standards and disclosure requirements in the interest of the investing public. The SC views non-compliance with the Regulations as a serious matter as high standards of financial reporting are fundamental in promoting market integrity and enhancing investor protection. The SC will not hesitate to take action against listed corporations and their officers for failure to comply with the applicable securities laws or regulations. SECURITIES COMMISSION 17 May 2005 Note to the Editor Note that the SC has taken action against Oilcorp Berhad on 24 March 2005 (reissuance of accounts) and Aktif Lifestyle Corporation Berhad on 4 May 2005 (public reprimand and reissuance of accounts) both in relation to breaches of Financial Reporting Standards. For further details, please refer to 2005 press releases on the SC website www.sc.com.my.

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