Bursa Malaysia Securities Publicly Reprimands Petrol One Resources Berhad And Its 2 Executive Directors

Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded PETROL ONE RESOURCES BERHAD (PETONE or the Company) and its 2 executive directors for breaches of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR).

PETONE was publicly reprimanded for breaching:

1. Paragraph 9.16(1)(a) of the Main LR in respect of the Company’s inaccurate/misleading quarterly report for the financial period ended 30 September 2011 (QR Sept 2011) announced on 30 November 2011, quarterly report for the financial period ended 31 December 2011 (QR Dec 2011) announced on 28 February 2012 and quarterly report for the financial period ended 31 March 2012 (QR March 2012) announced on 31 May 2012 which were subsequently amended on 2 July 2012 due to the error in the computation of the depreciation value of the Company’s vessels under property, plant and equipment; and
   
   
2. Paragraph 2.23(1) of the Main LR for failing to comply with Bursa Malaysia Securities’ directive issued on 14 March 2012 to ensure that a limited review was carried out by PETONE’s external auditors for the QR March 2012 and the quarterly report for the finacial period ended 30 June 2012 (QR June 2012).

PETONE is also required to review and ensure the adequacy and effectiveness of its financial reporting function and carry out a limited review on its quarterly report submissions. The limited review must be performed by the Company’s external auditors for four quarterly reports commencing no later from the quarterly report for the financial period ended 31 March 2014.  

The executive directors of PETONE at the material time were found to have breached paragraph 16.13(b) of the Main LR for permitting knowingly, or where they had reasonable means of obtaining such knowledge, PETONE to commit the breach of paragraph 2.23(1) of the Main LR.  The penalties imposed on the executive directors are as follows:-

Bursa Malaysia Securities views the contraventions seriously as the requirement for listed companies to submit financial statements that are factual, clear, unambiguous, accurate, succinct and contained sufficient information to enable investors to make informed investment decisions is of paramount importance in ensuring the integrity and reliability of financial statements and a fair and orderly market for securities that are traded on Bursa Malaysia Securities. Further, listed companies and directors must maintain the highest standards of integrity, accountability, corporate governance and responsibility, including ensuring compliance with the directives issued by Bursa Malaysia Securities.

BACKGROUND

PETONE had on 2 July 2012 announced the amended QR Sept 2011, QR Dec 2011 and QR March 2012. The deviation between the original unaudited results and the amended unaudited results was as follows:- 

The deviation was mainly due to the error in the computation of the depreciation value of the Company’s vessels under property, plant and equipment.

In addition, PETONE had failed to comply with the directive imposed by Bursa Malaysia Securities on 14 March 2012 to ensure that a limited review was carried out by PETONE’s external auditors for the QR March 2012 and the QR June 2012 (the Directive). It was unacceptable for the Company and its directors to disregard the Directive on the basis that a full scope comprehensive audit were being carried out for the financial year ended (FYE) 30 June 2012 which would cover the scope of audit for QR March 2012 and QR June 2012 and decided unilaterally to perform the limited review only for the quarterly reports from the quarterly report for the financial period ended 30 September 2012 (QR Sept 2012) onwards particularly where Bursa Malaysia Securities had rejected the Company’s request to commence the limited review from QR Sept 2012.

The finding of breach and imposition of the above penalties on PETONE and its executive directors 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 matter including the knowledge of the executive directors of the Directive and Bursa Malaysia Securities’ rejection of the Request, the importance of the Directive which served to enhance the credibility and reliability of the Company’s interim financial statements and the materiality of the deviation between the original and amended QR Sept 2011, QR Dec 2011 and QR March 2012 as set out above.