Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded Sumatec Resources Berhad (SUMATEC) in respect of the company’s fourth quarterly report for the financial year ended 31 December 2016 (QR Dec 2016) announced on 28 February 2017 which was in contravention of paragraph 9.16(1)(a) of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR).
Paragraph 9.16(1)(a) of the Main LR states that a listed issuer must ensure that each announcement made is factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions.
SUMATEC had failed to ensure that the QR Dec 2016 took into account the adjustments announced on 28 April 2017 (the Adjustments).
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 materiality of the breach and upon completion of due process.
SUMATEC was also required to review and ensure the adequacy and effectiveness of its financial reporting function and carry out a limited review on its quarterly report submissions. The limited review must be performed by the company’s external auditors for four quarterly reports commencing no later from the quarterly report for the financial period ended 30 September 2018. In addition, SUMATEC must ensure all its directors and relevant personnel attend a training programme in relation to compliance with the Main LR pertaining to financial statements.
While Bursa Malaysia Securities has not found any of SUMATEC’s directors to have caused or permitted the breach by the company, Bursa Malaysia Securities wishes to highlight and remind 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 SUMATEC at the material time was as follows:-
- Michael Lim Hee Kiang
- Abu Talib Bin Abdul Rahman
- Wan Kamaruddin Bin Dato’ Biji Sura @ Wan Abdullah
- Mohamad Bin Ismail
- Liew Boon Keat
- Mahusni Bin Hasnan
- Chan Yok Peng
- Datuk Che Mokhtar Bin Che Ali
- Dato’ Ahmad Johari Bin Abdul Razak
Bursa Malaysia Securities views the contravention seriously as the timely and accurate submission of financial statements to enable investors to make informed investment decisions is one of the fundamental obligations of companies listed on the Official List of Bursa Malaysia Securities.
BACKGROUND
SUMATEC had reported an unaudited profit attributable to the owners of the company of RM27,372,000 in its QR Dec 2016 announced on 28 February 2017 as compared to an audited loss attributable to owners of the company of RM62,018,000 in the audited financial statements for the financial year ended 31 December 2016 (AFS 2016) announced on 28 April 2017. The difference of RM89.39 million between the QR Dec 2016 and AFS 2016 represented a variance of 326.6%.
The Adjustments were mainly due to the Company’s failure to undertake proper/reasonable assessment and make provision for liabilities of RM71.415 million and additional impairment of assets of RM10.343 million in accordance with the relevant accounting standards. There were no reasonable explanations on the change of circumstances from the QR Dec 2016 to justify making the Adjustments only in the AFS 2016 and the Adjustments essentially did not arise from events/circumstances after the announcement of the QR Dec 2016.
