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Bursa Malaysia Securities Berhad (Bursa Malaysia Securities) has publicly reprimanded Bintai Kinden Corporation Berhad (BINTAI) and its directors for breaching the Bursa Malaysia Securities Main Market Listing Requirements (Main LR). In addition, five directors of BINTAI were fined a total of RM150,000.
BINTAI was publicly reprimanded for failing to ensure that the Company’s announcement dated 31 May 2012 on its fourth quarterly report for the financial year ended (FYE) 31 March 2012 (4th QR 2012) took into account the adjustments as stated in the announcement dated 31 July 2012 resulting in a significant deviation between the companies’ unaudited and audited results.
The failure to take into account the adjustments was in contravention of paragraph 9.16(1)(a) of the Main LR where a listed company must ensure that each announcement is factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions.
BINTAI is also required to carry out a limited review of its quarterly report submissions. The limited review must be performed by external auditors for four quarterly reports commencing from the quarterly report for the financial period ended 30 September 2013. In addition, BINTAI must ensure all its directors and relevant personnel attend a training program on compliance with the Main LR pertaining to financial statements. BINTAI is also required to review and assess the adequacy and effectiveness of its financial reporting function.
The following directors of BINTAI 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, BINTAI to commit the above breach. The penalties imposed are as follows:
| No | Director | Penalty |
|---|---|---|
| 1. | Tan Sri Dato’ Kamaruzzaman Bin Shariff Independent Non-Executive Chairman Audit Committee Member |
Public Reprimand and fine of RM25,000 |
| 2. | Ong Puay Koon Executive Vice Chairman |
Public Reprimand |
| 3. | Ong Choon Lui Group Managing Director/ Chief Executive Officer |
Public Reprimand and fine of RM50,000 |
| 4. | Yen Yew Wing @ Yen Yew Ming Executive Director |
Public Reprimand |
| 5. | Dato’ Zakri Afandi bin Ismail Independent Non-Executive Director Audit Committee Chairman |
Public Reprimand and fine of RM25,000 |
| 6. | Johari bin Mohd Akhir Independent Non-Executive Director Audit Committee Member |
Public Reprimand and fine of RM25,000 |
| 7. | Sherman Lam Yuen Suen Independent Non-Executive Director Audit Committee Member |
Public Reprimand and fine of RM25,000 |
| 8. | Toru Tanimoto Non-Independent Non-Executive Director |
Public Reprimand |
The finding of breach and imposition of the above penalties on BINTAI and its 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 the matter including factors giving rise to and materiality of the deviation, the impact of the breach and in relation to the directors, their respective roles and responsibilities in the company, particularly pertaining to financial management, preparation and review of financial statements and their conduct.
Bursa Malaysia Securities views the contravention seriously as listed companies are required to submit financial statements that are factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions.
BACKGROUND
(I) PUBLIC REPRIMAND ON BINTAI
On 31 May 2012, BINTAI reported an unaudited profit after tax and minority interest of RM17.137 million in its 4th QR 2012. However, on 31 July 2012, BINTAI announced an audited loss after tax and minority interest of RM9.486 million in its annual audited accounts for the FYE 31 March 2012. The difference of RM26.623 million between BINTAI’s unaudited and audited results for the FYE 31 March 2012 represented a variance of 155%.
The variance of RM26.623 million was mainly due to the provision for impairment losses on receivables which had been long outstanding and there were significant delays / uncertainty in the repayments (“the Adjustment”).
The Adjustment made subsequently in the audited results was without any reasonable explanation on the change of circumstances from the issuance of the 4th QR 2012 to the audited results.
(II) PUBLIC REPRIMAND AND A TOTAL FINE OF RM150,000 IMPOSED ON FIVE DIRECTORS
The directors had failed to discharge their duties to undertake reasonable assessment and enquiries in approving BINTAI’s 4th QR 2012 to ensure the 4th QR 2012 took into account the Adjustment particularly in the light of the following:
- The auditors had raised their audit issues / concerns over the receivables, and the recoverability of the amount due and requested the Company to provide justification on the recoverability; and
- Notwithstanding this and the request by the external auditors for justification on the recoverability of the receivables, the directors had accepted and relied on management’s views not to provide any impairment loss in respect of the receivables without further enquiry and assessment as to the reasonableness of management’s justification in respect of the same. The reliance placed on the management was unreasonable in the light of the facts and circumstances.
The penalties were imposed against the directors after taking into account their knowledge, roles and responsibilities and in respect of the audit committee members, their function to review financial statements, focusing on compliance with the accounting standards under the Main LR.
