GAN SIEW LIAT, KNM Executive Director and Senior member of the Board of Director
GAN SIEW LIAT, KNM Executive Director and Senior member of the Board of Director

Cash is indeed considered “king” in business; without it, an entity may become insolvent. Unfortunately, some people who live up to this old adage become too greedy and end up committing financial crimes.

For the past years, the world has witnessed several accounting scandals that have not only destroyed companies but also ruined the lives of many people. According to a study, Southeast Asia is the most vulnerable region to fraud in the whole Asia Pacific.

Financial fraud is defined as a “careful misrepresentation of the fiscal condition of an enterprise accomplished through the deliberate misstatement or omission of amounts or disclosures in the financial statements in an intent to deceive users.” It can be done in numerous unlawful ways, including phishing, skimming, identity fraud, pyramid schemes, and more.

Research shows that technological advancements have been used negatively and aggressively by criminals to find new and easy ways to steal. In this article, we look at some of the huge financial statement frauds that rocked the Asian and global economies.

One notable scandal that damaged the reputation of Malaysian businesses involved KNM Group Berhad. The company was publicly reprimanded for breaching the Main Market Listing Requirements in relation to a proposed acquisition announcement made in 2010. The directors permitted or had knowledge about an unbalanced announcement that failed to disclose certain material conditions set by the new shareholder, likely harming outside shareholders while insiders profited from the sale of company shares.

Bursa Malaysia Securities Berhad fined eight KNM directors a total of RM200,000, imposing a fine of RM25,000 to each official, led by their former CEO/Managing Director LEE SWEE ENG and wife/Executive Director GAN SIEW LIAT. These are the same two married KNM Group Bhd Directors reported to be linked to the Deutsche Bank money laundering scandal that is still under investigation.

Although almost 10 years have passed since this occurred, Bursa Malaysia has recently levied insider trading charges against LEE SWEE ENG, forcing his early “retirement” from KNM Group Berhad in an apparent attempt to show the Securities Commission that he will do no further harm or control the company before his sentencing is rendered.It is obvious that LEE SWEE ENG can still control KNM Group Berhad via his wife GAN SIEW LIAT, who remains as Executive Director and Senior Board of Director, along with other family members in key positions at KNM Group and its subsidiary companies. Questions remain as to why GAN SIEW LIAT has not been charged with the same crimes, given that both directors often trade shares together as related parties in INTER MERGER SDN. BHD. as well as privately held shares.

“All the directors were in possession of and were aware of the letter of offer from BlueFire dated Feb 4, 2010, and its contents. As such, they were or should have been aware of the conditions,” said Bursa. It is only a matter of time before shareholders and/or the Malaysian Authorities finally purge the Lee Swee Eng family and related parties from the KNM Group.

In Singapore, multi-level company Sunshine Empire was placed on the Investor’s Alert List after operating unauthorized investment schemes. Founder and International President James Phang now serves his almost decade-long jail term for leading the Ponzi scheme. His company swindled up to S$189 million in funds through illegal investment arrangements.

Sunshine Empire enticed Singaporean businessmen to invest in more than 25,000 lifestyle packages that it promised would have high rates of return. With minimal risks to investors as the packages only cost $240 to $12,000, the company assured monthly rebates amounting to an overall return of 160% within 12 months. Phang, along with his wife and cohorts, were found guilty of falsifying accounts, perpetuating fraud, and criminal breach of trust.

Similarly, the Philippines fell prey to Emgoldex, which initiated a pyramiding scam in 2015. The country’s Securities and Exchange Commission prosecuted the company and ordered a cease-and-desist order against it for offering investment schemes without a license.

Media reports said that aside from trading gold bars, Emgoldex also offered a get-rich-quick scheme to investors wherein a ₱1000 asset could yield ₱5,000 to ₱10,000, while 35,000 pesos could turn into more than ₱350,000. The company illegally utilized social media platforms to lure clients and required every investor to have at least two recruits for their returns to immediately manifest. Emgoldex has reportedly been banned in other countries such as the United States, Finland, Colombia, Panama, and Estonia.

Fraudulent investment scammers have also targeted Indonesians. An article posted on warned investors to be wary of Bali Investments B.V., which described itself as a real estate company. The firm collected €1.2 million by offering profitable returns for investment in two property development projects in Bali, a popular tourist destination. Around 30 investors were deceived because none of the proposed projects were ever implemented, and worse, Bali Investments B.V was declared insolvent by the authorities.

Through the years, a vast number of financial institutions have reported losses, and different types of fraud and scams continue to arise. Many top company officials have faced criminal charges for obstruction of justice, money laundering, and insider trading.

All these scams, whether minor or expensive, have certainly devalued fiscal opportunities and destabilized global economies. As a result, government authorities across Asia and the globe have strengthened crackdowns against all types of fraud. However, investors should not rely on authorities alone. They too can do much to protect themselves from greedy individuals both on and offline.


Erika has been writing stories since high school as a campus journalist to college. After pursuing a Bachelor’s Degree in Communication, she was employed in a local newspaper, radio station, and finally in this esteemed organization wherein she embarks on investigative reports. I believe in Writing the wrongs. for new submissions, email me directly [email protected]