KUALA LUMPUR: Bursa Malaysia Securities Berhad has publicly reprimanded Annum Berhad (ANNUM) and five of its directors for breaches of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR). Each of the five directors has been fined RM31,000.
ANNUM was found in violation of Paragraph 9.23(1) of the Main LR for failing to issue its annual report, which included audited financial statements and the auditors’ and directors’ reports for the 18-month financial period ended June 30, 2023, by the required deadline of October 31, 2023. Instead, the company only issued the report on May 8, 2024, after a delay of six months and eight days.
As part of the enforcement action, Bursa Malaysia Securities has directed ANNUM to ensure that:
- Directors Lim Yun Nyen, Khor Chin Meng, and Dato’ Baharon bin Talib, along with relevant personnel, attend a training program on compliance with the Main LR, particularly concerning financial statements.
- The Board of Directors reviews and assesses the adequacy and competency of the company’s finance and accounting resources, as well as the effectiveness of its policies and procedures related to financial reporting.
The five directors of ANNUM at the time of the breach were penalized under Paragraph 16.13(b) of the Main LR for permitting the company to commit the violation. The reprimanded directors are:
- Kenneth Chai Chuan Teong, Independent Non-Executive Chairman, Audit Committee Member (Resigned on September 18, 2023)
- David Wong You King, Executive Director (Resigned on July 6, 2023)
- Lim Yun Nyen, Executive Director
- Khor Chin Meng, Independent Non-Executive Director, Audit Committee Chairman
- Dato’ Baharon bin Talib, Executive Director
Each of these directors has been issued a public reprimand and a fine of RM31,000.
The enforcement decision was made under Paragraph 16.19 of the Main LR following due process, taking into account all relevant facts and circumstances, including the severity of the breach, its impact on ANNUM and its shareholders, and the roles and responsibilities of the directors.
Bursa Malaysia Securities emphasized the importance of timely financial reporting as a fundamental obligation of listed companies. Compliance ensures an orderly and fair market and is crucial for informed investment decisions. The regulator has also reminded ANNUM and its Board of Directors of their responsibility to uphold corporate governance and accountability to shareholders and the investing public.
The delay in issuing the annual report was primarily due to ANNUM’s decision to request its auditors to resign on August 3, 2023, approximately three months before the filing deadline. However, the company failed to secure new auditors in a timely manner, taking nearly seven months to appoint replacements on February 27, 2024. The report was subsequently issued on May 8, 2024.
Bursa Malaysia Securities found that ANNUM and its directors did not undertake reasonable inquiries or assessments regarding the feasibility of securing new auditors and completing the audit before requesting the resignation of the previous auditors. Despite the fact that David Wong and Kenneth Chai had resigned before the October 31, 2023 deadline and Dato’ Baharon was appointed in July 2023, they were still deemed to have played a role in the mismanagement of the audit process.
Furthermore, the new auditors issued a disclaimer of opinion on the financial statements, which resulted in ANNUM triggering the criteria under Paragraph 2.1(d) of Practice Note 17 (PN17). As a result, ANNUM was classified as a PN17 issuer on May 8, 2024, the same day it released its long-overdue annual report.
This enforcement action by Bursa Malaysia Securities serves as a firm reminder that non-compliance with financial reporting obligations will not be tolerated. Companies and their boards must ensure robust governance and accountability to maintain investor confidence and market integrity.
