Bursa Malaysia Securities Publicly Reprimands Multi Sports Holdings Ltd And 5 Directors And Fines 3 Directors

1.

Financial Reporting Breaches

MSPORTS had failed to announce/issue its annual report for the financial year ended (FYE) 31 December 2015 and 31 December 2016 and quarterly reports from the period ended 30 June 2016 until 30 June 2017 within the stipulated timeframes, in contravention of paragraphs 9.23(1) and 9.22(1) of the Main LR respectively.

MSPORTS has yet to announce/issue the above financial statements as at to-date.

2.

Corporate Governance Breaches

MSPORTS had failed to comply with the following requirements on the composition of its board of directors and audit committee:-

(a)   paragraph 15.02(1) read together with paragraph 15.02(3) of the Main LR for failing to ensure that there were at least 2 independent directors in its board of directors after 3 months from the resignations of the independent directors, Ang Wei Chuan and Bernard Tan Chin Teik on 20 April 2016 (“resignations of Ang and Bernard”).  MSPORTS had only filled the vacancies and appointed 5 independent directors on 4 October 2016;

(b)   paragraph 15.09(1) read together with paragraph 15.19 of the Main LR for failing to have an audit committee after 3 months from the resignations of Ang and Bernard (who were the audit committee chairman/member respectively) on 20 April 2016. MSPORTS had only reconstituted and appointed 3 members to its audit committee on 16 November 2016; and 

(c)    paragraph 15.10 of the Main LR for failing to elect a chairman amongst the members of the audit committee until 26 July 2017. 

3.

Foreign Listing Requirements Breaches

MSPORTS had failed to comply with the following foreign listing requirements:-

(a)  paragraph 4A.04(2) of the Main LR for failing to have at least 2 independent directors whose principal or only place of residence is within Malaysia after the resignations of Ang and Bernard, who were the Malaysian independent directors.  MSPORTS had only appointed 5 independent directors who are Malaysians on 4 October 2016;

(b)  paragraph 4A.04A of the Main LR for failing to ensure that its audit committee has at least 1 independent director who has a principal or only place of residence in Malaysia after the resignations of Ang and Bernard. MSPORTS had only appointed 2 independent directors who are Malaysians to its audit committee on 16 November 2016; and

(c)   paragraph 4A.05 of the Main LR for failing to appoint an agent or representative in Malaysia to be responsible for communication with Bursa Malaysia Securities on behalf of the Company from 1 July 2016 to 2 November 2016.

4.

Disclosure Breaches

MSPORTS had failed comply with the following provisions of the Main LR on disclosure requirements:-

(a)      paragraphs 9.19(12) and 9.19(13) of the Main LR for failing to:-

1. make an immediate announcement of the change in the composition of the board of directors and audit committee upon the resignation of Wong Wang Lam, an independent non-executive director and audit committee member of MSPORTS. His resignation was informed to the public by Bursa Malaysia Securities via a listing circular on 2 September 2016; and
2. make an immediate announcement of the appointment of Naren Anand Gill, Clarence Yeow Kong Chew and Cheh Chee Mun as members of the audit committee on 16 November 2016.  The announcement was only made on 25 July 2017;

(b)   paragraph 9.19(14A) of the Main LR for failing to make an immediate announcement of the resignation of its chief financial officer with effect from 8 July 2016. The resignation was informed to the public by Bursa Malaysia Securities via a listing circular on 2 September 2016;

(c)    paragraphs 9.19(6) and 9.19(7) of the Main LR for failing to make an immediate announcement of:-

1. the notice of requisition dated 16 August 2016 to convene a special general meeting to put forward resolutions for amongst others, the appointment of 6 directors (“the 1st requisition”).  The 1st requisition was informed to the public by Bursa Malaysia Securities via a listing circular on 2 September 2016;  
2. the notice to call for a special general meeting sent on 9 September 2016 (“the 2nd requisition”) as the board of directors did not call for the meeting on the 1strequisition.  The 2nd requisition was again informed to the public by Bursa Malaysia Securities via a listing circular on 21 September 2016; and
3. the outcome of the special general meeting held on 4 October 2016 where all the resolutions were passed by the shareholders present at the meeting.  This was informed to the public by Bursa Malaysia Securities via a listing circular on 5 October 2016;

(d)   paragraph 9.28(3A) of the Main LR for failing to make the monthly announcements on the status of the issuance of the outstanding annual report for the FYE 31 December 2015 (AR 2015) and quarterly report for the financial period ended 30 June 2016.  MSPORTS had made an announcement on the status of the outstanding AR 2015 on 31 May 2016 and did not provide the monthly update / status since then until 29 November 2016.

5.

Non-Compliance with Bursa Malaysia Securities’ Directives

MSPORTS had contravened paragraph 2.23(1) of the Main LR for it had failed to comply with the instructions or directives of Bursa Malaysia Securities:-

(a)   vide emails dated 14, 16 & 29 June 2016 to provide Bursa Malaysia Securities with, amongst others,  –

• the status of the audit for the financial year ended 31 December 2015; and
• the actions taken / being taken on the new appointment of the independent directors, audit committee, company secretary and agent; 

(b)   vide letters dated 4 & 16 August 2016 for MSPORTS to –

• announce the resignations of the chief financial officer and independent director, Wong Wang Lam; and
• announce the monthly update on the status of the outstanding AR 2015; and

(c)     vide letter dated 19 August 2016 for MSPORTS to announce the 1st requisition,

(hereinafter collectively referred to as “the Instructions / Directives of Bursa Malaysia Securities”).

1.

Lin Huozhi

Executive Chairman

paragraph 16.13(a) of the Main LR for causing MSPORTS to commit the Financial Reporting Breaches

Public Reprimand and total fines of RM656,000*

paragraph 16.13(b) of the Main LR for permitting MSPORTS to commit the Corporate Governance Breaches, Foreign Listing Requirements Breaches, Disclosure Breaches and the Non-Compliance with Bursa Malaysia Securities’ Directives

Public Reprimand and fine of RM1,000,000

2.

Lin Liying

Executive Director cum Chief Executive Officer

paragraph 16.13(a) of the Main LR for causing MSPORTS to commit the Financial Reporting Breaches

Public Reprimand and total fines of RM656,000*

paragraph 16.13(b) of the Main LR for permitting MSPORTS to commit the Corporate Governance Breaches, Foreign Listing Requirements Breaches, Disclosure Breaches and the Non-Compliance with Bursa Malaysia Securities’ Directives

Public Reprimand and fine of RM1,000,000

3.

Ang Wei Chuan

Independent Non-Executive Director and Audit committee Chairman

(appointed on 25 August 2014 and resigned on 20 April 2016)

paragraph 16.13 of the Main LR for causing and permitting MSPORTS to commit the breach of paragraph 9.23(1) of the Main LR on the failure to issue the AR 2015 on or before 30 April 2016

Public Reprimand

4.

Bernard Tan Chin Teik

Independent Non-Executive Director and Audit committee member

(appointed on 22 June 2015 and resigned on 20 April 2016)

paragraph 16.13 of the Main LR for causing and permitting MSPORTS to commit the breach of paragraph 9.23(1) of the Main LR on the failure to issue the AR 2015 on or before 30 April 2016

Public Reprimand

5.

Wong Wang Lam

Independent Non-Executive Director and Audit committee member

(appointed on 20 May 2014 and resigned on 21 June 2016)

paragraph 16.13 of the Main LR for causing and permitting MSPORTS to commit the breach of paragraph 9.23(1) of the Main LR on the failure to issue the AR 2015 on or before 30 April 2016

Public Reprimand and fine of RM7,200