Kenyataan Media
BURSA MALAYSIA PUBLICLY REPRIMANDS KBB RESOURCES BERHAD AND FINES THREE DIRECTORS A TOTAL OF RM150,000
Bursa Malaysia Securities Berhad ("Bursa Securities") has publicly reprimanded KBB Resources Berhad ("KBB") and three of its former executive directors for failing to make an immediate, clear and accurate announcement on the defaults in payment of various credit facilities. The directors were also fined a total of RM150,000.
KBB breached paragraphs 9.03(1) and 9.04(l) of the Main Market Listing Requirements ("Main LR") read together with paragraphs 2.1(d) and/or (e) of Practice Note 1 ("PN1") for failing to make an immediate announcement on the defaults in payments of various credit facilities. In addition, KBB's announcement on 26 July 2010 breached paragraph 9.16(1)(a) of the Main LR as the announced date of the defaults (i.e., 21 July 2010) was not factual and was inaccurate in view of KBB's confirmation to Bursa Securities that the credit facilities [i.e., Bankers Acceptances ("BAs")] had expired as early as 29 June 2010.
The following directors of KBB at the material time were found to be in breach of paragraph 16.13(b) of the Main LR for permitting knowingly, or where they had reasonable means of obtaining such knowledge, KBB to commit the breach of paragraphs 9.03(1) and 9.04(l) of the Main LR read together with paragraphs 2.1(d) and/or (e) of PN1:
No. | Director | Penalty |
---|---|---|
1. | Dato' Ang Cho Teing
Group Managing Director (Retired on 22 June 2011) |
Public Reprimand and fine of RM50,000 |
2. | Datin Tai Chok Ping
Executive Director (Resigned on 1 February 2011) |
Public Reprimand and fine of RM50,000 |
3. | Ang Chor Teng
Executive Director (Resigned on 30 November 2011) |
Public Reprimand and fine of RM50,000 |
Bursa Securities views the contraventions seriously and reminds KBB and its Board of Directors of their duty to uphold appropriate standards of responsibility and accountability to shareholders and the investing public.
BACKGROUND
Based on the information provided by KBB to Bursa Securities, there were defaults in payment of the credit facilities when the BAs expired as early as 29 June 2010 and KBB failed to settle / pay the same. The total amount of the BAs, which expired as at 9 July 2010, amounted to RM4,893,002. This represented 5.4% of the Company's net assets as at 31 December 2009, thus triggering the requirement for announcement under paragraph 2.1(d) of PN1. However, KBB only announced the defaults on 26 July 2010.
The explanation that KBB only announced the defaults on 26 July 2010 upon receipt of the first letter of demand from United Overseas Bank (M) Bhd's solicitors on 24 July 2010 is unacceptable. Paragraph 2.1 of PN1 requires an immediate announcement of default on interest, principal payments or both in respect of loans irrespective of whether a demand has been made.
The finding of the breaches and imposition of the above penalties 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 following:-
- The materiality of the breach where the requirement for listed issuers to make an immediate announcement of material default in payment of credit facilities was fundamental to enable investors to make informed investment decisions concerning the listed issuer's financial condition; and
- The role, responsibilities and conduct of the directors:-
- The directors had knowledge of the defaults and/or were involved in the negotiation with the banks for repayment / restructuring of the credit facilities;
- Notwithstanding their roles and responsibilities and knowledge of the defaults, the directors had represented and/or allowed the representation to the board that there was no default on borrowings; and
- Ang Chor Teng and Datin Tai Chok Ping had respectively disposed 97% and 51% of their direct interest in KBB on 21 July 2010 (i.e., the date of default as represented by the directors and stated in the Company's announcement on 26 July 2010) prior to the PN1 announcement on 26 July 2010. By virtue of Datin Tai Chok Ping's disposal, Dato' Ang Cho Teing had also disposed 51% of his deemed interest.