Securities Commission Malaysia: SC fines Ranhill Energy and Resources Berhad and Tan Sri Hamdan Mohamad

Securities Commission Malaysia (SC) has imposed a fine of RM200,000 on Ranhill Energy and Resources Berhad (Ranhill) and reprimanded and fined Tan Sri Hamdan Mohamad RM 300,000 for failure to disclose to SC material changes related to Ranhill’s listing.
 
Both Ranhill and Tan Sri Hamdan, Executive Director/President and Chief Executive of Ranhill, were found to have breached section 215(3) read with section 354(1) of the Capital Markets and Services Act 2007, for failing to immediately inform the SC of the suspension of the licence issued by Petroliam Nasional Berhad to Perunding Ranhill Worley Sdn Bhd (PRW), a company controlled by Tan Sri Hamdan. The notice of suspension was received on 17 July 2013.
 
Ranhill relies on PRW for contracts secured from PETRONAS. This contract represents a material contribution to Ranhill Group’s revenue. The suspension of the license is therefore deemed as a material change in circumstance as it poses potential adverse implications on Ranhill’s oil and gas business. Under the circumstances, Ranhill and Tan Sri Hamdan were required to immediately inform the SC of the material change in circumstance under section 215(3) of the CMSA as the earlier disclosures in the listing prospectus of Ranhill would no longer be considered accurate or reflective of prevailing circumstances, and possibly misleading.
 
In the disclosure of such material development in this case, time is of essence, given that the retail and institutional offering by Ranhill had closed, the date for the allotment of shares to successful applicants was approaching, and investors needed to be given the opportunity and time to re-evaluate their investment decision.
 
SC views timely and transparent disclosure of material information by companies and promoters seeking to raise funds via an IPO, as fundamental to ensuring trust and confidence in the capital market. Companies, promoters and advisers are reminded to exercise vigilance in this regard.