.jpg)
Bursa Malaysia Securities Berhad (Bursa Malaysia Securities) has publicly reprimanded ETI Tech Corporation Berhad (ETITECH) for breaching paragraphs 9.03(1) and 9.04(l) of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR) read together with paragraph 2.1(d) of Practice Note 1 (PN1) for failing to make an immediate announcement in respect of the default in payments of credit facilities by its major subsidiary, ETI Tech (M) Sdn. Bhd. (ETI).
Paragraphs 9.03(1) and 9.04(l) of the Main LR read together with paragraph 2.1(d) of PN1 state that a listed issuer is required to immediately announce to the Exchange, irrespective of whether a demand has been made to the listed issuer, its subsidiaries or associated companies, as the case maybe, of default in payments of either interest, principal sums or both in respect of a credit facility where the total amount outstanding of the defaulted credit facility is 5% or more of the net assets of the listed issuer based on the latest published or announced financial statements.
The public reprimand was imposed pursuant to paragraph 16.19(1) of the Main LR after taking into consideration all facts and circumstances of the matter including the fact that ETITECH had previously breached the listing requirements and upon completion of due process.
While Bursa Malaysia Securities has not found any of ETITECH’s directors to have caused or permitted the breach by the company, Bursa Malaysia Securities wishes to highlight that it is the duty of the directors to maintain appropriate standards of responsibility and accountability in ensuring compliance of the Main LR. The Board of Directors of ETITECH at the material time was as follows:-
- Dato’ Ahmad Shukri bin Tajuddin
- Lee Kah Kheng
- Dato’ Dennis Chuah
- Khor Yee Kwang
- Nordin bin Mohamad Desa
- Baqir Hussain bin Hatim Ali
- Lim Mei Theng
- Raja Chik Jaafar bin Raja Mokhtar
Bursa Malaysia Securities views the contravention seriously and has reminded ETITECH and its Board of Directors of their obligation to uphold appropriate standards of responsibility and accountability to shareholders and the investing public.
BACKGROUND
ETI had defaulted in the credit facilities granted by Standard Chartered Bank Malaysia Berhad (SCB) on 30 November 2012 and Maybank Islamic Berhad (MIB) and Malayan Banking Berhad (MBB) on 28 February 2013. However, ETITECH only announced the default in payments on 9 January 2013 and 25 March 2013 respectively. The total amount outstanding of the defaulted credit facilities to SCB, MIB and MBB as noted from the company’s announcements on 9 January 2013 and 25 March 2013 exceeded 5% of the company’s net assets respectively and cumulatively amounting to RM18,944,118.62 which represented 18.5% of the company’s net assets of RM102,172,000 and 67.7% of the company’s total borrowing of RM27,981,000 as at 31 August 2012.
There was a high volume of ETITECH’s shares transacted on 10 January 2013 i.e. 29.8 million shares against the daily average volume of 2.1 million shares for the preceding 5 market days and ETITECH’s share price had dropped 25% from RM0.08 on 9 January 2013 to RM0.06 on 10 January 2013 i.e. the next market day after the company made the PN1 announcement.
