Case 3 Flight Of Funds
C A S E 3
Asian Journal of Case
Research
4(S): 27 – 44 (2011)
Flight of Funds
MOHD NOOR ABU BAKARa, MARIATI NORHASHIMb*
AND ABDUL HAMID MOHAMED GHOWSc
ABSTRACT
In 2006, Malaysian Travels Sdn Bhd, a subsidiary of a public listed company, purchased 40% equity in Turkistan Global Services Sdn
Bhd on the basis of a project paper which outlined a potential travel business to exploit opportunities in Turkistan. Turkistan Global
Services Sdn Bhd purported to have acquired the opportunity through a Memorandum of Understanding (MoU) signed by a Malaysian
Minister with a Turkistan Minister for exclusive rights to handle logistic arrangements for the promotion of businesses between the two countries. However, other than the shares contract, no other documentation existed to prove that money had been invested into the company with the understanding that the money would be used specifically for carrying out the proposal. It is now 1 April 2009.
A new Chief Executive Officer, Mr Idris bin Junid, was appointed for the holding company, Travel Investment Holdings Bhd. While conducting a review of the TIH group, he came upon a discrepancy in the form of an investment in Malaysian Turkistan Travels Sdn Bhd made by a subsidiary, Malaysian Travels Sdn Bhd (MTSB). He recalled his conversation with an old friend who used to work in MTSB who told him of the circumstances surrounding the company. The company was cashflow stricken; staff morale was low as they had not been paid their salaries on time or their bonuses for the past three years. Idris immediately requested the Corporate Finance Department to submit a report detailing what had happened in MTSB on the Turkistan Global
Services Project. The job was outsourced to an external auditor, Agoos
A member of the Malaysian Institute of Accountants (MIA), Malaysian Institute of Certified Public
Accountants (MICPA), Financial Planning Association of Malaysia (FPAM), Malaysian Institute of
Management (MIM), Institute of Marketing
Asian Journal of Case
Research
4(S): 27 – 44 (2011)
Flight of Funds
MOHD NOOR ABU BAKARa, MARIATI NORHASHIMb*
AND ABDUL HAMID MOHAMED GHOWSc
ABSTRACT
In 2006, Malaysian Travels Sdn Bhd, a subsidiary of a public listed company, purchased 40% equity in Turkistan Global Services Sdn
Bhd on the basis of a project paper which outlined a potential travel business to exploit opportunities in Turkistan. Turkistan Global
Services Sdn Bhd purported to have acquired the opportunity through a Memorandum of Understanding (MoU) signed by a Malaysian
Minister with a Turkistan Minister for exclusive rights to handle logistic arrangements for the promotion of businesses between the two countries. However, other than the shares contract, no other documentation existed to prove that money had been invested into the company with the understanding that the money would be used specifically for carrying out the proposal. It is now 1 April 2009.
A new Chief Executive Officer, Mr Idris bin Junid, was appointed for the holding company, Travel Investment Holdings Bhd. While conducting a review of the TIH group, he came upon a discrepancy in the form of an investment in Malaysian Turkistan Travels Sdn Bhd made by a subsidiary, Malaysian Travels Sdn Bhd (MTSB). He recalled his conversation with an old friend who used to work in MTSB who told him of the circumstances surrounding the company. The company was cashflow stricken; staff morale was low as they had not been paid their salaries on time or their bonuses for the past three years. Idris immediately requested the Corporate Finance Department to submit a report detailing what had happened in MTSB on the Turkistan Global
Services Project. The job was outsourced to an external auditor, Agoos
A member of the Malaysian Institute of Accountants (MIA), Malaysian Institute of Certified Public
Accountants (MICPA), Financial Planning Association of Malaysia (FPAM), Malaysian Institute of
Management (MIM), Institute of Marketing