Board Advisers Can Also Be Liable for False Financial Statements

Responsibility for false financial statements is often linked to a company's directors. A recent court decision shows that a person who is not a director can also be convicted.

On 28 October 2026, the Securities Commission (SC) said the Kuala Lumpur High Court had dismissed the appeal of Lee Koon Huat, a former adviser to the board of directors of Axis Incorporation Berhad, and upheld his conviction and sentence.

He was convicted of abetting Axis in giving false financial statements to Bursa Malaysia. According to the SC, the evidence showed that he instructed that the company's reported revenue be inflated in four unaudited quarterly results for the financial year 2007.

In 2022, the Sessions Court found him guilty on all four charges. He was sentenced to six months' jail and a RM200,000 fine for each charge, with the jail terms to run at the same time. The High Court has since paused the jail term, but not the fine. He must pay a total of RM800,000 by 28 October 2026, or serve jail time instead.

Three former executive directors of Axis had earlier pleaded guilty to related charges under plea bargains.

The charges relate to results for the financial year 2007, and the High Court's decision came in October 2026. The SC said the decision reaffirms the importance of accuracy and integrity in financial reporting by listed companies.

If you wish to make sure your company's accounts and financial statements are kept clear and accurate, our team can help. Feel free to WhatsApp us at 010-246 2151.