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We take a very strict view of breaches to our Business Rules and Listing Requirements and undertake enforcement proceedings and actions according to the severity of the breach as these infractions have the potential to undermine investors’ rights and protection as well as market integrity.

Enforcement of Listing Requirements

Key Enforcement Cases

Enforcement of Listing Requirements

Director Enforcement under the LR

Bursa is empowered to take enforcement actions against listed companies and directors for contraventions of the LR. Where there is breach of the LR by the listed company and the breach is material (in terms of, amongst others, conduct and impact), enforcement may be taken under paragraph 16.13 of the LR against the director(s) who have caused, aided, abetted or permitted the listed company to contravene the LR. Other than under paragraph 16.13 of the LR, enforcement may be taken against a director for contravention of specific obligation or requirement imposed under the LR on the director regardless of whether there is a breach by the listed company.

In determining the culpability of each director in the company under the LR, one of the factors taken into consideration is whether a director has discharged his duties owed to the company and in particular the duty of care, skill and diligence. In this regard, Bursa is guided by the legal duties imposed on directors under the Companies Act, 1965 (CA) including Section 132(1A) of the CA, the principles derived from decisions of the courts of law/legal cases and principles and best practices set out in the Corporate Governance Code. These include the following duties/principles:-

  1. Directors are under a continuing obligation to ensure that they acquire and maintain sufficient knowledge and understanding of the company's business to enable them to properly discharge their duties as directors.

  2. Directors may delegate and trust the competence and integrity of the delegate to a reasonable extent (unless they are aware of circumstances that could indicate otherwise). This however does not absolve the directors from a continuing care obligation of supervision in relation to those officers and employees to whom responsibilities have been delegated as well as a continuing obligation to ensure that the necessary control structures are put in place in the company to effect such supervision.

In this regard, in assessing a director's discharge of the obligations under the LR, records /evidence which would provide an insight as to the steps/actions taken by the director would be pertinent and considered as follows :-

  1. Necessary steps were taken to ensure compliance/prevent contravention of the LR such as:

    • Ensure that company has established, maintained and implemented an effective governance system and processes including risk management and internal control systems.

    • Timely scheduled board and audit committee meetings and required sufficient notice and distribution of papers and information in advance of meetings.

    • Updated on company's business and operation, undertake proper inquiry and follow up on inquiry made.

    • Refrain from rushing into decision-making and ensure proper assessment and deliberation and to make informed decisions based on information provided/requested and necessary advices.

    • Ensure proper record of deliberations on key decisions including stating in the minutes dissenting views and maintenance of the said records (including financials and minutes of meetings) by the listed company.

    • Maintain records of steps taken to address a compliance issue (eg. to address compliance with obligation to issue financial statements).

  2. Effective and expeditious steps were taken to resolve issues upon knowledge of the said issues to enable/ensure compliance.

Directors could get more insights and guidance as to how they can effectively discharge their role and duties under the LR from the Corporate Governance Guide "Towards Boardroom Excellence" issued by Bursa which is available on Bursa's website as well as the enforcement cases (Case Studies) set out below. In addition, whenever in doubt as to the application of the LR, listed companies and directors are encouraged to seek clarification from Bursa.

The Case Studies provided herein are intended to facilitate ease as well as better understanding of the factors considered by Bursa in determining the culpability and penalty imposed on the listed company and director(s). As some of the Case Studies pertain to enforcement cases which do not involve public reprimand, the identity of the listed companies and directors are confidential and hence, not disclosed. For the Case Studies that involve public reprimand, the date of and the link to the media release will be set out below the said Case Study which will set out the details of the listed company and directors.

Case Studies

  1. Delay in Issuance of Financial Statements  [As at 14 February 2019]

  2. Misleading Statements – Material deviation of the figures reported between the announced unaudited financial figures and audited financial figures for the same financial period by the listed company  [As at 23 June 2016]

  3. Other Disclosure Breaches - Promotional / Selective Disclosure / Delay in Announcing Material Information  [As at 17 January 2017]

  4. Inaccurate Disclosures / Announcements [As at 28 February 2018]

  5. Provision of Financial Assistance  [As at 27 February 2013]

  6. Related Party Transactions - Failure to Announce/Appoint Adviser/Procure Shareholders' Approval

  7. Enforcement for Non-Compliance of Dealing in Quoted Securities by Directors under Chapter 14 of the LR

  8. Failure to Comply with Bursa's Directives [As at 14 February 2019]

  9. Failure to Establish Internal Audit Function [As at 17 January 2017]

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