Proton holdings should explain whether it has engaged in creative accounting by claiming after-tax profits of RM 3.5 million when it had actually made an operational loss of RM 49 million in the second quarter
_____________
Press Statement
by Lim Guan Eng
_________________
(Petaling Jaya,
Thursday):
Proton
should explain whether it has
engaged in creative
accounting by claiming
after-tax profits of RM 3.5
million when it had actually
made an operational loss of
RM 49 million in the second
quarter ended 30.9.2007.
Proton had claimed improved
sales and better cost
management had contributed to
its first profits after five
consecutive quarters of net
losses.
Such recovery by Proton in
recording its first profits
since early 2006 is deceptive
when it is still making
operational losses. These
so-called profits in the
second quarter included a
write-back from previous
year’s development cost
amounting to RM 46 million
and gain on land disposal of
RM 6.6 million. Taking out
these two extraordinary items
out, Proton would have
actually suffered a net loss
of RM 49 million.
Proton had been desperate to
offer good news since its
share price plummeted to a 10
year low of RM 3.54 when it
called off the potential
strategic alliance with
either Volkswagen or General
Motors. Net profit after tax
was RM 3.51 million against
an after tax loss of RM
250.34 million previously and
a lower pre-tax loss of RM
41.90 million in the first
six months ended 30 September
2007 against a pre-tax loss
of RM 336.02 million in the
corresponding periods last
year enabled Proton shares
prices improve. However with
poor export sales and a share
of only one third of the
domestic market as compared
to two-thirds less than 10
years ago, the future
prospects are dim and dismal.
For this reasons, Proton’s
talk of introducing new
models will not help, unless
it captures a significant
export market and establishes
a partnership with an
overseas manufacturer that
will generate economies of
scale. More importantly,
Proton should practice
generally acceptable
accounting practices that
does not hide its operational
losses so as not to lose
confidence with the investor
public that it is resorting
to desperate and dishonest
practices to restore its
financial credibility.
(06/12/2007)
* Lim Guan
Eng,
Secretary-General of DAP |