ENFORCEMENT
Enforcement of Listing Requirements
Director Enforcement under the Listing Requirements
Bursa Malaysia is empowered to take enforcement actions against listed issuers and directors for contraventions of the Listing Requirements. Where there is breach of the Listing Requirements by the listed issuer and the breach is material (in terms of, amongst others, conduct and impact), enforcement may be taken against the director(s) who have caused, aided, abetted or permitted the listed issuer to contravene the Listing Requirements. In addition, enforcement may be taken against a director for contravention of specific obligation or requirement imposed under the Listing Requirements on the director regardless of whether there is a breach by the listed issuer.
In determining the culpability of each director in the company under the Listing Requirements, 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 Malaysia is guided by the legal duties imposed on directors under the Companies Act, 2016 (CA) including Section 213 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:-
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.
Directors may delegate and trust the competence and integrity of the delegatee to a reasonable extent (unless they are aware of circumstances that could indicate otherwise). This however does not absolve the directors from a continuing duty of care and obligation to supervise 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 Listing Requirements, records/evidence which would provide an insight as to the steps/actions taken by the director would be pertinent and considered as follows:-
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Necessary steps were taken to ensure compliance/prevent contravention of the Listing Requirements 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 issuer.
- Maintain records of steps taken to address a compliance issue (e.g. to address compliance with obligation to issue financial statements).
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Effective and expeditious steps were taken to resolve issues upon knowledge of the said issues to enable/ensure compliance.
Directors can get more insights and guidance as to how they can effectively discharge their role and duties under the Listing Requirements from the Corporate Governance Guide issued by Bursa Malaysia which is available on Bursa Malaysia's website as well as the Key Enforcement Cases set out below. In addition, whenever in doubt as to the application of the Listing Requirements, listed issuers and directors are encouraged to seek clarification from Bursa Malaysia.
The Key Enforcement Cases provided herein are intended to facilitate ease as well as better understanding of the factors considered by Bursa Malaysia in determining the culpability and penalty imposed on the listed issuer and director(s). As some of the Key Enforcement Cases pertain to enforcement cases which do not involve public reprimand, the identity of the listed issuers and directors are confidential and hence, not disclosed. For the Key Enforcement Cases that involve public reprimand, the date of and the link to the media release will be set out below the said Key Enforcement Cases.
Key Enforcement Cases:
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Delay in Issuance of Financial Statements [As at 22 February 2024]
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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 22 February 2024]
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Other Disclosure Breaches - Promotional / Selective Disclosure / Delay in Announcing Material Information [As at 22 February 2024]
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Inaccurate Disclosures / Announcements [As at 22 February 2024]
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Provision of Financial Assistance [As at 24 February 2023]
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Transaction Requirements [As at 24 February 2023]
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Enforcement for Non-Compliance of Dealing in Quoted Securities by Directors under Chapter 14 of the LR [As at 22 February 2024]
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Failure to Comply with Bursa Malaysia's Directives/Undertaking [As at 22 February 2024]
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Failure to Establish Internal Audit Function [As at 24 February 2023]