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BURSA MALAYSIA SECURITIES PUBLICLY REPRIMANDS SKP RESOURCES BERHAD AND FINES 3 EXECUTIVE DIRECTORS A TOTAL OF RM200,000

29 Nov 2016

KUALA LUMPUR, 29 NOVEMBER 2016 - Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded SKP Resources Berhad (SKP or the Company) and 3 executive directors, for breaches of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Main LR).  In addition, the 3 executive directors of SKP were fined a total of RM200,000.

SKP is publicly reprimanded for committing the following breaches of the Main LR:-

  1. paragraph 9.03(1) read together with paragraph 9.04(b) of the Main LR which prescribes that a listed issuer must make immediate public disclosure of any material information and the acquisition of a contract is one of the examples of events which may require immediate disclosure.

    SKP had failed to make an immediate announcement to the market when the Company secured a new material contract with the value of about/up to RM400 million per year for a tenure of 5 years from its existing customer (the Contract) on 3 May 2015. SKP only made the announcement of the Contract on 18 & 20 May 2015; and

  2. paragraph 9.08(2) of the Main LR which prescribes that a listed issuer must ensure that no disclosure of material information is made on an individual or selective basis to analysts, shareholders, journalists or other persons unless such information has previously been fully disclosed and disseminated to the public (i.e. to Bursa Malaysia Securities pursuant to paragraph 9.08(5) of the Main LR). In the event that material information is inadvertently disclosed on the occasion of any meeting with analysts, shareholders, journalists or others, it must be publicly disseminated as promptly as possible.

    SKP had verbally disclosed the Contract including the contract value to 2 research houses on 7 May 2015 without making an announcement of the same to Bursa Securities immediately thereafter. The announcement on the Contract was only made to Bursa Malaysia Securities on 18 & 20 May 2015.

In addition to the public reprimand, SKP is required to undertake or arrange for the necessary training programme(s) in relation to compliance with the disclosure obligation under the Main LR and ensure its directors and relevant personnel of the Company attend the same.

The 3 executive directors of SKP are publicly reprimanded for breaching paragraph 16.13(b) of the Main LR where they had permitted SKP to commit the above breaches. In addition, fines are imposed on them as follows:-

No.

Directors

Breach

Penalties Imposed

1.

Dato’ Gan Kim Huat

Executive Chairman & Managing Director

paragraph 9.03(1) of the Main LR

Public Reprimand and fine of RM25,000

paragraph 9.08(2) of the Main LR

Public Reprimand and fine of RM50,000

 

Public Reprimand and total fines of RM75,000

2.

Gan Poh San

Executive Director

paragraph 9.03(1) of the Main LR

Public Reprimand and fine of RM25,000

paragraph 9.08(2) of the Main LR

Public Reprimand and fine of RM50,000

 

Public Reprimand and total fines of RM75,000

3.

Chia Choong Kim

Executive Director

paragraph 9.03(1) of the Main LR

Public Reprimand

paragraph 9.08(2) of the Main LR

Public Reprimand and fine of RM50,000

 

Public Reprimand and fine of RM50,000

The finding of breach and imposition of the above penalties on SKP and the directors were made pursuant to paragraph 16.19 of the Main LR upon completion of due process and after taking into consideration all the facts and circumstances of the matter including the following:-

  1. The materiality of the Contract to SKP where:-
    1. The Contract which concerns SKP’s business and prospects was reasonably expected to have and in fact, had a material effect on the price, value or market activity of SKP’s securities particularly from 8 May 2015 (after release of the research reports which raised the target price of the Company to RM1.18 / RM1.25 from RM0.85) to 18 & 20 May 2015 (after the Company’s announcements of the Contract); and
    2. The contract value of RM400 million per year represented 97% and 65% of the Company’s revenue for the financial year ended 31 March 2014 of RM412.77 million and financial year ended 31 March 2015 of RM619.27 million respectively.

    The representations that the Contract was part of the ordinary course of business of the Company to manufacture and supply products to the existing customer in accordance with a principal agreement which was earlier announced and value of the Contract was merely a forecast/estimation did not absolve the Company’s obligation to make an immediate announcement of the Contract which was material and the key terms and conditions of the Contract (including the estimated value of up to RM400 million per year) in accordance with paragraph 9.03(1) of the Main LR. 

  2. The knowledge, role, responsibilities and conduct of the directors including that:-
    1. Dato’ Gan Kim Huat and Gan Poh San had been delegated with the authority to assess and ensure announcements on material transactions for the Company. They were involved / aware of the Contract but had failed to make proper assessment and ensure an immediate announcement of the Contract in accordance with paragraph 9.03(1) of the Main LR.  In addition, Gan Poh San had met the research houses and disclosed the Contract to them on 7 May 2015 without ensuring prior announcement of the same was made to Bursa Malaysia Securities and hence, in contravention of paragraph 9.08(2) of the Main LR;
    2. Chia Choong Kim was the executive director responsible for overseeing the business operations of SKP Group and had knowledge of the Contract.  He was or should be aware of the disclosure requirement and materiality of the Contract and as such, he should have ensured the Company make an immediate announcement of the Contract in accordance with paragraph 9.03(1) of the Main LR.  He could not merely relied on the other 2 executive directors; and
    3. Both Dato’ Gan Kim Huat and Chia Choong Kim had also permitted the Company’s breach of paragraph 9.08(2) of the Main LR as they were aware of the meeting with the research houses and the disclosure of the Contract to the research houses in the meeting even though no prior announcement of the same was made to Bursa Malaysia Securities.

Bursa Malaysia Securities views the contraventions seriously as the disclosure obligations including the requirement to make timely disclosure of material information are fundamental obligations of listed companies to preserve and sustain market integrity and investor confidence.

Bursa Malaysia Securities has reminded SKP and its Board of Directors on their responsibility to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public.