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Bursa Malaysia Securities Berhad [Registration No.: 200301033577 (635998-W)] (Bursa Malaysia Securities) has publicly reprimanded JAKS Resources Berhad (JAKS) and its Principal Adviser, Kenanga Investment Bank Berhad (KIBB) for breaches of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR).
JAKS and KIBB were publicly reprimanded for breach of paragraph 6.56(1)(b) of the Main LR and paragraph 6.02(5) of the Main LR read together with paragraph 6.56(1)(b) of the Main LR and paragraph 2.1(e) of Practice Note 28 respectively for failing to ensure that there were at least 10 market days’ notice from the date JAKS announced the books closing date to the books closing date for the adjustment to the exercise price and/or additional number of JAKS’ Warrants 2018/2023 (JAKS-WB) arising from the proposed rights issue with warrants announced on 22 May 2020.
The finding of breach and imposition of the public reprimand on JAKS and KIBB were made pursuant to paragraph 16.19 of the Main LR upon completion of due process after taking into consideration all facts and circumstances of the matter including the materiality and impact of the breach.
Bursa Malaysia Securities views the contravention seriously as paragraph 6.56(1)(b) of the Main LR serves to provide sufficient time for securities holders or investors to make a decision of the entitlements to the interests, new securities or other distributions or rights arising from adjustments made due to an issue of securities.
Bursa Malaysia Securities wishes to remind listed issuers and advisers to maintain the highest standards of integrity, accountability, corporate governance and responsibilities in ensuring compliance of the Main LR.
BACKGROUND
On 22 May 2020, JAKS announced that the company proposed to undertake a renounceable rights issue of new ordinary shares together with free detachable warrants and that the proposed rights issue with warrants may give rise to adjustments to the exercise price and/or additional number of JAKS-WB (Adjustments).
On 13 October 2020, JAKS announced that the entitlement/books closing date (BCD) for the proposed rights issue with warrants was fixed on 27 October 2020 but did not announce the BCD for the Adjustments. JAKS had only on 26 October 2020 announced that the BCD for the Adjustments was fixed on 27 October 2020 and stated that the delay in the announcement was due to oversight.
As the announcement of the BCD for the Adjustments was only made on 26 October 2020 after trading hours, there was short notice of less than 1 day to the BCD and the holders of JAKS-WB were essentially deprived of the opportunity to make a decision in respect of the Adjustments. Further, the price of JAKS-WB was not adjusted on 26 October 2020 i.e. the ex-date which had impacted the fair and orderly trading of JAKS-WB.
Both JAKS and its appointed Principal Adviser, KIBB have a duty to ensure compliance of paragraph 6.56(1)(b) of the Main LR which imposes a clear requirement that the period from the date the listed issuer announces the BCD for the issue of convertible securities arising from adjustments due to an issue of securities to the BCD must not be less than 10 market days.
