Malaysia's market regulator said it has begun investigations into air cargo carrier Transmile Group which had reported financial irregularities and sharply revised down its results for the last two years.
Transmile, the highest-profile example of financial irregularities that rocked the Malaysian market, said on Monday a special audit found it had incurred losses, not profits, for its last two fiscal years.
The stock, suspended ahead of the announcement of the audit's findings, fell as much as 17% to 5.45 ringgit when it resumed trading on Tuesday, but pared some of the losses and traded down 8.3% percent at 6.05 ringgit by the midday.
"The Securities Commission has already commenced our investigations and will decide on the appropriate action upon completion of the investigations," it said in a statement late on Monday, in response to questions forwarded by Reuters.
Assuming full provisioning for the irregularities, Transmile should post a pre-tax loss of 172 million ringgit ($49.78 million) instead of a profit of 207 million ringgit in financial year 2006, the firm said on Monday, citing the audit findings.
Transmile, controlled by Hong Kong-based billionaire businessman Robert Kuok, is worth half its year-ago value, with most of that loss incurred in the last month when the irregularities surfaced.
The company said last month its 2005 and 2006 revenues could have been overstated by 30% and 36% respectively.
No one has been charged so far for Transmile's irregularities but Second Finance Minister Nor Mohamed Yakcop and the stock exchange have said action could be taken against the company.
"It is important that when these breaches occur, immediate action is taken against wrongdoers," the Securities Commission said.
"In this regard, the Securities Commission has built a strong set of investigative and enforcement capabilities and as evidenced by the actions taken, those committing breaches of securities laws are dealt with severely."
Besides Transmile, recordable disc maker Megan Media Holdings, state-controlled lender Bumiputra-Commerce Holdings and small technology firm Wimems Corp. were among local firms that have reported some form of financial irregularities recently.