A cargo carrier whose shareholders include Malaysia's richest man Robert Kuok may have overstated its consolidated revenues by US$157 million over the past two years, the company said on Wednesday.

In a statement to the stock exchange, Transmile reported on interim findings made by Moores Rowland Risk Management which is carrying out a special audit.

Transmile said that in its interim report, the auditor found that in the financial year ended Dec 31, 2006, invoices were issued and recorded for purported services to 20 companies totalling RM333 million.

"This may result in an overstatement in the consolidated revenue by RM333 million," Transmile said.

The auditors also found invoices issued for purported services to 19 companies totalling RM197 million in the 2005 financial year, Transmile said.

"This may result in an overstatement in the consolidated revenue by RM197 million," it said.

The findings may result in Transmile having to re-state its 2006 and 2005 earnings if full provisions have to be made.

Transmile's 2006 pretax profit of RM207 million could be reduced to a loss of RM126 million, while the 2005 pretax profit of RM120 million could be cut to a RM77 million ringgit loss, the company said.

Accounting irregularities

Malaysia's securities watchdog said last Friday it raided Transmile's offices to probe accounting irregularities arising from a lack of supporting documents to some trade receivables and fixed asset purchases.

Transmile said earlier this month it had failed to meet the deadline to submit audited financial statements for 2006.

In its statement on Wednesday it said that in conjunction with the special audit it will work toward finalising the annual statutory audit for the last financial year.
Along with Kuok, Transmile's shareholders include JP Morgan, Goldman Sachs, the Singapore government and national postal company Pos Malaysia.

Transmile said it had formed an executive committee which assumed authority of the chief executive officer, "arising from governance issues relating to the release of the announcement on the unaudited consolidated results for the financial year ended December 31, 2006."

The Transmile Group provides express air cargo and international freight services, chartering, aircraft leasing, and general freight services.

It said it was confident services would continue uninterrupted.