The time frames for listed companies to regularise their financial condition have also been extended to 31 December 2002.
Pursuant to the KLSE's Listing Requirements, listed companies are required to have an adequate level of financial condition in order to warrant continued trading and listing on the Official List of the Exchange. In making this requirement operational, Practice Note 4/2001 (PN4) was issued and took effect from 15 February 2001. Generally, under the requirements of PN4, affected listed companies were given a period of 12 months to regularise their financial condition unless otherwise extended by the KLSE.
Extended Time Frames
This extended time frame will be made applicable to affected listed companies that have made the announcement no later than the 31 December 2001 that they are a company affected by PN 4 (PN4 Companies).
With the extended time frame, these PN4 Companies now have up to 31 December 2002 to obtain all regulatory approvals necessary for the implementation of their plans. Consequently, KLSE will only commence de-listing procedures against these PN4 companies, where appropriate, after 31 December 2002.
However, those PN4 companies that are unable to comply with the original time frames under PN4, must still apply for an extension of time to the KLSE with the appropriate justifications for the extension of time. Where an extension of time is granted, the listed securities of the PN4 companies may continue to be traded
Where an extension of time is not granted, the listed securities of the PN4 companies will be suspended from trading. In this instance, KLSE will only commence de-listing procedures against these suspended PN4 companies after 31 December 2002.
To date, there are 95 PN4 companies, of which the securities of 45 PN4 companies have been suspended from trading, whilst the securities of 50 PN4 companies are still being traded.
Introduction of Additional Investor Protection Measures
The KLSE will undertake the following additional measures, effective 1 March 2002 to alert investors of the risks associated in the trading of the securities of PN4 companies and to facilitate investors' identification of PN4 companies,:
Trading Restriction
The securities of PN 4 companies that fail to comply with the time frames specified in PN 4 will be subjected to trade restriction in the form of full payment before purchase. This trade restriction will continue to be imposed on these PN4 companies until the regularisation of their financial condition.
Separate Classification
Additionally, KLSE will introduce a separate classification for PN4 companies for easy identification on both the KLSE Real Time Price Information (KLSE RTPI) and the relevant publications of the KLSE. This separate classification is in addition to the current flagging on KLSE RPTI and the KLSE LINK.
In this regard, KLSE seeks the co-operation of all printed media to publish the separate classification of PN4 companies in the interest of keeping investors and shareholders updated and well-informed.
KLSE would like to emphasise that notwithstanding this extended time frame, KLSE will continue to monitor PN4 companies to ensure appropriate steps are taken for the expeditious regularization of their financial condition.
