BURSA MALAYSIA SECURITIES PUBLICLY REPRIMANDS KAF-SEAGROATT & CAMPBELL BERHAD FOR BREACH OF MAIN MARKET LISTING REQUIREMENTS

Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded KAF-Seagroatt & Campbell Berhad (KAF) in respect of the company’s fourth quarterly report for the financial year ended 31 May 2015 (“QR 4/2015”) announced on 31 July 2015 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.

KAF had failed to ensure that the QR 4/2015 took into the adjustments as stated in its announcement dated 30 September 2015.

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 impact on KAF’s share price movement and volume traded after announcement of the QR 4/2015 and the company’s audited financial statements / adjustments and upon completion of due process.

KAF is 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 31 May 2016.  In addition, KAF 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 KAF’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 KAF at the material time of announcement of the QR 4/2015 was as follows:-

1. Dato’ Ahmad Bin Kadis
2. YTM Raja Dato’ Seri Eleena Binti Sultan Azlan Shah
3. Datuk Khatijah Binti Ahmad
4. Peter Lee Siew Choong
5. Dato’ Fauziah Binti Dato’ Ismail
6. Faisol Zulkifli

Bursa Malaysia Securities views the contravention seriously as 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

KAF had reported an unaudited profit after taxation and minority interest of RM4.193 million in its QR 4/2015 announced on 31 July 2015 as compared to an audited profit after taxation and minority interest of RM5.715 million in the audited financial statements for the financial year ended 31 May 2015 (AFS 2015) announced on 30 September 2015.  The difference of RM1.522 million between the QR 4/2015 and the AFS 2015 represented a variance of 36.3%.

The adjustments were mainly in respect of:-

1. the reclassification of income derived from the KAF Sukuk Fund (KSF) amounting to RM971,000 from ‘available-for-sale reserve’ to ‘net profit’ for the financial year. KAF had admitted that the adjustment was due to an incorrect accounting treatment and the reclassification should have been made in the QR 4/2015; and
2. the adjustment in taxation amounting to RM551,000 due to an increase in deferred tax assets arising from the additional provision made for bonus in a subsidiary which was provided in the QR 4/2015 but KAF omitted to update / provide for the deferred tax computation.