Bursa Malaysia Securities Berhad has taken enforcement action against Waja Konsortium Berhad (WAJA) and two of its directors for violating the ACE Market Listing Requirements (ACE LR). The company received a public reprimand, while Managing Director Peh Lian Hwa and Executive Director Peh Jia Yau were each fined RM100,000.
Failure to Make Timely Disclosures
WAJA breached Rule 8.04(3)(b) of the ACE LR, read alongside paragraph 4.1(a) of Guidance Note 3 (GN3), by failing to promptly issue a First Announcement after releasing its quarterly financial report for the period ending June 30, 2023 (QR 30/6/2023) on August 24, 2023. This report indicated financial distress under paragraphs 2.1(b) and 2.1(c) of GN3, requiring immediate public disclosure. However, WAJA delayed the announcement until October 10, 2023—1.5 months later—only making the disclosure after engagement by Bursa Malaysia Securities.
Directors Held Accountable
The two directors were found liable under Rule 16.13(b) of the ACE LR for allowing the breach, resulting in the following penalties:
| Director | Position | Penalty |
|---|---|---|
| Peh Lian Hwa | Managing Director | Public Reprimand, RM100,000 Fine |
| Peh Jia Yau | Executive Director | Public Reprimand, RM100,000 Fine |
Impact of the Breach
Bursa Malaysia Securities emphasized the seriousness of the infraction, stating that timely disclosure of financial distress is crucial for shareholder and investor decision-making. Being classified under GN3 could lead to potential suspension or delisting if WAJA fails to regularize its financial position within the timeframe prescribed under Rule 8.04 of the ACE LR.
Key financial red flags from WAJA’s report included:
- A loss of RM44.032 million for the 18-month period ending June 30, 2023, exceeding its shareholders’ equity of RM37.198 million, which was also less than 50% of its RM113.357 million share capital.
- Consecutive losses totaling RM68.59 million over two financial years, with the latest loss surpassing 50% of the previous year’s deficit.
Bursa Malaysia Securities noted that WAJA failed to provide a reasonable justification for the delay in disclosure.
Lapses in Leadership Oversight
The Managing Director and Executive Director had a fundamental duty to ensure regulatory compliance, particularly concerning financial reporting and disclosures. Despite prior warnings from external auditors about WAJA’s financial distress, they neglected to act decisively, resulting in regulatory penalties.
This enforcement action underscores the importance of corporate governance, transparency, and adherence to Bursa Malaysia’s listing requirements, serving as a stern warning to other listed companies and their leadership teams.
