Megan Media Berhad is a company that provides management consultancies.

The company engages in the manufacture sale and marketing of data

storage products such as computer diskettes ,video cassete tape, digital
versatile recording and so on. The company also manufactures supplies and
distributes consumer products. (Bloomberg, 2015) Megan Media Holdings
Berhad had faced a serious finanicial downfall in the year of 2007. The
company was discovered a serious corporate governance and accounting
misleads. (Jaya S, 2007) Megan Media Berhad that was reported accounting
fraud. Megan Media s auditor had cause a net loss of RM 1.14 billion.
According to the unaudited results released on July 2, throughout the end of
April 2007 the net loss was RM 1.6 billion. However, Megan MEDIA Holding
Berhad wishes to reiterate that further to previous announcements, the
investigation work into the fraud and irregularities still going on and as well
is the companys current annual audit. (Moolah,2007). The investigation
discovered that the payments to all trading creditors were actually made to
other parties in a move to channel cash out of Memory Tech Sdn Bhd.
(investlah,2013)
Megan Media Behard announced accounting misstatements in its books, at
first their trade receivables were inflated. The accounting fraud was at its
subsidiary, Memory Tech Sdn Bhd. The trade receivable now is 13.061 million
and net debts now is 597.607 million and the net liability per share now is
3,92 million. ( Moolah, 2007). Megan Media Berhad revealed fraudulent
accounting and trading practices that could result in an asset shortfall of RM
456 million, its actual fixed asset value of RM 585 million was also in debt.
( Jaya S, 2007). Megan Media Berhad said that it would engage the creditor
banks to formulate the debt restructuring scheme and regulations plan in
ensuing weeks, and to also initiate legal action to recover the lost amount
due to irregularities. (investlah,2013)
However, the incident may be a blessing in disguise as it could give
regulations a freer hand in dealing with corporate fund. It could help to force

listed companies to appoint directors and members of its audit committee

more on the basis of merit than reward. With that being said, Megans
problems came to light after its 2 subsidiaries defaulted on debt causing
creditor banks to force an investigation. Analyst said it had to do increasing
pressure from the authorities. (Jaya S,2007) Megan Media Berhad announced
that the state of solvency would ultimately depend on the outcome of the
debt restricting and regularization endeavor. ( investlah, 2013)
In my opinion, these issues should be taken seriously by all companies. In
the first place Megan Media Berhad wasnt paying much attention to their
account. Megan Meda Berhad wasnt careful and it led to accounting fraud.
Megan Media Berhad Corporate advisors were so well treated that the
auditors have become more than stringent. I personally think government
should really take precautions on the new amendments to the companies act
to burden the auditors more onerous government plays a major role in
helping organizations/companies in reducing crisis if they are willing to take
major actions and not just ignore the crisis faced by companies. Aside from
that, Malaysia should really consider in enforcing stricter punishment such as
mandatory jail terms for accounting frauds or suspicions of frauds. What we
need is faster justice system and not for a delay of court cases just to settle
an accounting fraud or a bankruptcy issues. We need our system to be
consistent and effective. Jail time of 7 years or being fined a couple of
millions doesnt work effectively anymore, auditors are immune from being
sued for whistle-blowing (Jaya S, 2007)

References
Jaya S (2007). BTS Msian Economy can take external shock. Berita Malaysia
Moolah (2007). Megan Media Posts RM 1.148 Net loss in 4Q.
whereiszemoda.blogspot.com
Investlah(2013).The biggest corporate scandals. www.investlah.com