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Tuesday, June 16, 2015

Probe allegations on AirAsia’s suspect accounting practices

Former MP says SC and KLSE must investigate allegations that AirAsia is using transactions with associate companies to boost its earnings.
chee-keong-airasia
PETALING JAYA: A GMT Research report that levels serious allegations against low-cost carrier AirAsia in regard to suspect accounting practices must be investigated promptly, said former MP for Wangsa Maju Wee Choo Keong.
“Such investigations are very necessary to instil confidence of the investing public to invest in our capital market,” Wee said when commenting on the report alleging that AirAsia was using transactions with associate companies to boost its earnings.
In the report carried by Reuters, Hong Kong-based GMT Research had questioned the airline’s accounting practices, with its founder Gillem Tulloch saying that they were in discussions with the company about their concerns.
“In view of the seriousness of the GMT Research report on AirAsia’s accounting practices, the Securities Commission and Bursa Malaysia are duty bound to carry out an in-depth investigation into the serious allegations,” Wee said in his latest blog posting.
He also hoped Maybank analyst Mohshin Aziz was right in vouching for the airline as he had maintained his “buy” call on the stock despite the allegations having surfaced.
“It is hoped that En Mohsin Aziz’s confidence was not misplaced otherwise the image of Maybank will be adversely affected.”
According to the news report, Mohshin had said Maybank believed AirAsia’s accounts were transparent and that auditors had approved the latest 2014 accounts without any qualification.
However a spokeswoman from PwC, the company’s auditor, declined to comment on the grounds of client confidentiality and AirAsia themselves have remained mum on the allegations.
The GMT Research allegation caused AirAsia’s stock to fall as low as 1.73 ringgit on Friday, the lowest in five years, against Maybank’s price target of RM2.45 on the stock.
Shares in AirAsia X, the long-haul arm of AirAsia, also fell, declining 8 per cent since June 9.

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