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Bursa Malaysia Securities Berhad [Registration No.: 200301033577 (635998-W)] (Bursa Malaysia Securities) has publicly reprimanded Pasdec Holdings Berhad (PASDEC) and its former Group Managing Director, Dato’ Sri Tew Kim Thin (Dato’ Sri Tew) for breaches of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR). In addition, Dato’ Sri Tew was fined RM12,500.
PASDEC was publicly reprimanded for breach of paragraph 9.23(1) of the Main LR where the company had failed to issue its annual report that included the annual audited financial statements (AFS) together with the auditors’ and directors’ reports for the financial year ended (FYE) 31 December 2018 (AR 2018) on or before 30 April 2019 (Breach). PASDEC had only issued the AR 2018 on 11 June 2019.
PASDEC was also required to review and ensure the adequacy and effectiveness of its financial reporting function. In addition, PASDEC must ensure Dato’ Sri Tew and the relevant personnel attend a training programme in relation to compliance with the Main LR pertaining to financial statements.
Dato’ Sri Tew had breached paragraph 16.13(b) of the Main LR for permitting knowingly or where he had reasonable means of obtaining such knowledge, PASDEC to commit the Breach.
The finding of breach and imposition of the above penalties on PASDEC and Dato’ Sri Tew were made pursuant to paragraph 16.19 of the Main LR upon completion of due process and after taking into consideration all facts and circumstances of the matter including the materiality of the Breach, impact of the Breach to PASDEC and shareholders/investors and the roles, responsibilities, knowledge and conduct of Dato’ Sri Tew.
Bursa Malaysia Securities views the contravention seriously as the timely submission of financial statements is one of the fundamental obligations of listed companies and is of paramount importance in ensuring a fair and orderly market for securities traded on Bursa Malaysia Securities and necessary to aid informed investment decisions.
The delay in issuance of the AR 2018 was mainly due to the failure of the Company and Dato’ Sri Tew to resolve the audit issue on the redemption of the preference shares (RPS) issued by Pasdec Automotive Technologies (Botswana) (Pty) Ltd (PATBW) to Bostwana Development Corporation (RPS Issue) which would affect the company’s ability to continue as a going concern and the audit opinion.
The Company and Dato’ Sri Tew were aware of the RPS Issue and the seriousness/implications if the RPS Issue remained unresolved given the numerous communications and notices by the external auditors and the Chief Operating Officer since it was first highlighted as one of the area of audit emphasis rated as ‘high’ in the audit plan tabled at the Audit Committee meeting on 21 November 2018. However, the RPS Issue was only resolved with the external auditors towards end of May 2019.
In addition, the external auditors had in the audit plan tabled at the Audit Committee meeting on 21 November 2018 raised recurring concern on the delay in finalisation of the audit of PASDEC’s South Africa subsidiaries in previous years due to untimely documents/workings received from management. However, PASDEC had failed to demonstrate reasonable and expeditious steps taken to ensure that the audit and AFS of its subsidiaries were completed and finalised on time for the external auditors’ review and consolidation into the AFS of PASDEC Group prior to the due date of 30 April 2019, towards timely finalisation of the AR 2018. The outstanding matters on the audit of the South Africa subsidiaries (other than the RPS Issue) were only resolved with the external auditors on 22 & 27 May 2019 and 7 June 2019 and it was further noted that there were numerous erroneous and inconsistencies in the information and documents provided to the auditors.
Dato’ Sri Tew being the Group Managing Director and only Executive Director at the material time had failed to discharge his duties to address and resolve the RPS Issue expeditiously and to monitor and supervise the management. He had merely relied on the management to ensure timely completion of the audit of the subsidiaries.