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Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded Golden Plus Holdings Berhad (GPLUS) and 10 directors for breaches of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR). In addition, the 10 directors were also fined.
GPLUS was publicly reprimanded for numerous financial reporting breaches and other breaches of the Main LR as follows:-
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No. |
Breach |
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1. |
Financial Reporting Breaches & Non-Compliance with Bursa Malaysia Securities’ Directive
GPLUS had failed to announce / issue its financial statements from the annual audited accounts and annual report for the financial year ended (FYE) 31 December 2010 until 2014 and the quarterly reports for financial years 2011 until 2014 within the stipulated timeframes, in contravention of paragraphs 9.22 and 9.23 of the Main LR.
In addition, GPLUS had failed to comply with Bursa Malaysia Securities’ directive vide letter dated 5 August 2013 for GPLUS to announce the outstanding annual audited accounts for FYE 31 December 2010, 2011 and 2012 by 31 December 2013, in contravention of paragraph 2.23(1) of the Main LR.
GPLUS has yet to announce / issue the outstanding financial statements as at to-date.
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2.
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Inaccurate Disclosure in GPLUS’ AAA 2008 & 2009 GPLUS had breached paragraph 9.16(1)(a) of the Main LR in respect of the disclosures in Notes 8 and 35 of GPLUS’ audited accounts for FYE 31 December 2008 and 2009 (AAA 2008 & 2009) announced on 30 July 2010 which were inaccurate. (a) Note 8 of the AAA 2008 & 2009 had stated that:-
However, it was noted that:-
(b) Note 35 of the AAA 2009 on the Contingent Liabilities of RM414.602 million from “guarantees given to financial institutions for financing facilitiesgranted to purchasers of houses under a subsidiary company's housing project in the People's Republic of China”. However, it was found that the guarantees were in fact given for credit facilities granted to companies connected to China Idea Development Limited which was purportedly to finance the development of the Royal Garden project in Shanghai, China.
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3. |
Immediate Disclosure of Material Information GPLUS had also failed to make an immediate announcement of the following:-
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4.
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Recurrent Related Party Transactions Requirements GPLUS had failed to comply with the requirements under paragraph 10.08 of the LR to make an immediate announcement and obtain prior shareholders’ approval in respect of the advertising and management fees paid in relation to the Royal Garden project from year 2007 to 2009 when the percentage ratio of the aggregated fees paid within a period of 12 months from year 2007 to 2009 exceeded 1% and 5% respectively. The details of the advertising and management fees paid for 3 years from 2007 to 2009 are as follows:-
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5. |
Failure to Establish Internal Audit Function GPLUS had contravened paragraph 15.27(1) of the Main LR for failing to establish an internal audit function since 29 February 2012 until to-date. |
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10 directors of GPLUS were publicly reprimanded for breaches of paragraph 16.13(b) of the Main LR where they had permitted GPLUS’ failure to issue its financial statements and/or non-compliance with Bursa Malaysia Securities’ Directive. In addition, fines were imposed on them as follows:-:
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No. |
Director |
Penalty Imposed |
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1. |
Dato’ Setia Abdul Halim Bin Dato’ Haji Abdul Rauf (Resigned on 4 February 2013) Chairman, Non-Independent & Non-Executive Director (Appointed to the Board on 1 July 2006 and re-designated as Chairman on 10 August 2006) |
Public Reprimand and Fine of RM132,400 |
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2. |
Goh Sin Tien (Resigned on 17 June 2013) Executive Director (Appointed to the Board on 28 March 1997 and re-designated as Executive Director on 30 July 2004) |
Public Reprimand and Fine of RM784,000 |
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3. |
Dato’ Yahaya Bin Udin (Resigned on 27 March 2012)
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Public Reprimand and Fine of RM65,000 |
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4. |
Dato’ Jeyaraj A/L V. Ratnaswamy (Resigned on 25 October 2012)
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Public Reprimand and Fine of RM239,200
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5. |
Yeoh Hor San (Resigned on 18 May 2013)
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Public Reprimand and Fine of RM298,400 |
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6. |
Tan Say Han
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Public Reprimand and Fine of RM643,800 |
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7. |
Mohd Salleh bin Lamsin Executive Director (appointed on 2 April 2013 and re-designated to Non-Executive Director on 1 November 2015)
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Public Reprimand and Fine of RM514,000 |
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8. |
Adey bin Liun
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Public Reprimand and Fine of RM235,600 |
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9. |
Lee Chan Vun @ Lee Kon Vun (Resigned on 31 October 2015)
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Public Reprimand and Fine of RM199,400 |
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10. |
Lim Jit Hui @ Albert Lim (Resigned on 31 October 2015)
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Public Reprimand and Fine of RM136,600
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Pursuant to Bursa Malaysia Securities’ directive to GPLUS to appoint a special auditor to review the affairs and accounts and records of the company, its subsidiaries and associated companies, GPLUS had on 17 December 2010 appointed PricewaterhouseCoopers Advisory Services Sdn. Bhd. (PwC). The special audit by PwC which was completed in 2013 revealed numerous material audit findings. This report was relevant towards ascertaining the culpability of GPLUS and its directors in relation to GPLUS’ financial reporting breaches above and other breaches of the listing requirements. Therefore, the enforcement actions against GPLUS and its directors were taken after completion of investigation including procurement of various documents and evidence and explanations in respect of the audit findings by PwC as well as explanations by / from a multitude of parties involved and due process accorded to GPLUS and its directors.
The finding of breach and imposition of the above penalties on GPLUS and the 10 directors were made pursuant to paragraph 16.19 of the Main LR after taking into consideration all facts and circumstances of the matter including the materiality of the breaches, impact of the breaches to GPLUS and shareholders and the role, responsibilities, conduct and involvement of the directors.
Bursa Malaysia Securities views the contraventions seriously and reminds listed companies and directors of their responsibility to maintain appropriate standards of corporate responsibility and accountability to its shareholders and the investing public.
BACKGROUND
GPLUS had failed to announce its annual audited accounts for the FYE 31 December 2010 (AAA 2010) which was due since 30 April 2011 and the subsequent financial statements thereafter until to-date, in contravention of paragraphs 9.22 and 9.23 of the Main LR.
Based on GPLUS’ representations, the main reason for its failure to submit its financial statements was due to the non-finalisation of its subsidiaries accounts. The subsidiary, Yanfull Investments Ltd (YIL) had disputed that its accounts were improperly prepared by the holding company (GPLUS) prior to the consolidation into GPLUS’ AAA 2008 & 2009 which were issued on 30 July 2010.
Arising from the delays and subsequent to the completion of the special audit by PwC, Bursa Malaysia Securities had issued a directive vide letter dated 5 August 2013 for GPLUS to announce the outstanding annual audited accounts for FYE 31 December 2010, 2011 and 2012 by 31 December 2013.
Notwithstanding the finalisation and approval of YIL’s accounts on 28 October 2013 and the directive by Bursa Malaysia Securities, GPLUS had failed to finalise and issue its outstanding financial statements to date due to other unresolved issues. Further, since the resignation of its external auditors on 15 October 2012, GPLUS and its directors had yet to appoint a new external auditors to finalise and announce / issue the outstanding financial statements.
Bursa Malaysia Securities has found the contention by the directors that the events leading to the delay in finalisation of YIL’s accounts and GPLUS’s financial statements were purportedly outside their control to be without any basis. The directors were found to be in breach of their obligations under paragraph 16.13(b) of the Main LR where they had permitted GPLUS’ failure to announce / issue its financial statements premised on the following:-
- The respective roles and responsibilities of the directors in respect of financial management including the preparation and finalization of the financial statements of the company.
- The conduct of the directors at the material time of the submission due date of the AAA 2010 on 30 April 2011 where they had failed to:-
- take reasonable steps to monitor and expeditiously address / resolve the significant audit issues which formed the basis to the external auditor’s proposed disclaimer opinion and qualification in the AAA 2010. These unresolved audit issues / proposed disclaimer opinion / qualification which had been highlighted and reminded by the external auditors to GPLUS and its board of directors since 25 November 2010 had led to the non-finalisation of the AAA 2010 on 30 April 2011; and
- ensure the proper preparation, review and approval of GPLUS’ AAA 2008 & 2009 vis-à-vis the significant amount owing from CIDL to YIL pursuant to the Management Agreement which was the main dispute with YIL and had led to the subsequent rectification / re-do of YIL’s accounts and the prolonged delay in the finalisation of GPLUS’ outstanding financial statements.
- The directors’ failure to take reasonable steps to resolve the audit issues leading to the delay in finalisation of YIL’s accounts.
The purported actions / activities taken by the directors which were essentially mere reminders to and reliance on the relevant parties i.e. the management of GPLUS and its subsidiaries and the auditors of YIL to finalise the outstanding financial statements for a period ranging from 1 year to more than 2 years during their tenure were not acceptable in the discharge of their obligations. - The directors’ failure to take reasonable steps to enquire, ascertain and resolve all other issues (other than pertaining to YIL) delaying the finalisation and submission of GPLUS’ financial statements.
In addition, 4 directors i.e. Tan Say Han, Mohd Salleh bin Lamsin, Adey bin Liun and Lee Chan Vun @ Lee Kon Vun had also breached paragraph 16.13(b) of the Main LR where they had permitted GPLUS’ failure to comply with Bursa Malaysia Securities’ Directive to announce the outstanding annual audited accounts for FYE 31 December 2010, 2011 and 2012 by 31 December 2013.
