BURSA MALAYSIA SECURITIES PUBLICLY REPRIMANDS AND/OR FINES RENEUCO BERHAD AND FIVE (5) DIRECTORS

Bursa Malaysia Securities Berhad [Registration No.: 200301033577 (635998-W)] (Bursa Malaysia Securities) has publicly reprimanded Reneuco Berhad (RENEUCO) and five (5) of its directors for breach of the Bursa Malaysia Securities MAIN Market Listing Requirements (MAIN LR). In addition, one (1) director was imposed a fine of RM2,500.

RENEUCO was publicly reprimanded for breach of the following provisions of the MAIN LR: -

(a)    Paragraph 9.23(1) of the MAIN LR for failing to issue the annual report that included the audited financial statements together (AFS 2023) with the auditors’ and directors’ report for the 15-month financial period ended 30 September 2023 (AR 2023) on or before 31 January 2023 (Due Date).  RENEUCO only issued the AR 2023 on 8 February 2024, after a delay of five (5) market days,

(b)    Paragraph 9.28(3) of the MAIN LR for failing to make an announcement that the Company would not be able to issue its AR 2023 by the Due Date on or before 26 January 2024 i.e. not later than three (3) market days before the expiry of the Due Date. The Company had only made the required announcement on its inability to issue the AR 2023 on 30 January 2024, i.e. one (1) market day before the expiry of the Due Date.

RENEUCO was also required to ensure: -

• its directors (except Ahmad Riza bin Mohd Saian who had retired) and relevant personnel attend a training programme in relation to compliance with the MAIN LR particularly pertaining to financial statements; and
• its Board of Directors (Board) reviews and assesses the adequacy and competency of the company’s finance and accounting resources and adequacy, comprehensiveness, implementation and effectiveness of the company’s policies and procedures in respect of financial reporting.

Five (5) directors of RENEUCO at the material time had breached paragraph 16.13(b) of the MAIN LR where they had permitted RENEUCO’s failure to issue AR 2023 on or before the Due Date for which the following penalties were imposed on them: -

The finding of breach and imposition of the above penalties on RENEUCO and the directors were made pursuant to paragraph 16.19 of the MAIN LR upon completion of due process and after taking into consideration all facts and circumstances of the matter including the materiality of the breach, impact of the breach to RENEUCO and its shareholders/investors, and the roles, responsibilities, knowledge and conduct of the directors.

Bursa Malaysia Securities views the breach seriously as timely submission of financial statements is a fundamental obligation of listed companies and is of paramount importance in ensuring an orderly and fair market for securities traded on Bursa Malaysia Securities and necessary to aid informed investment decisions.

Bursa Malaysia Securities has also reminded RENEUCO and its Board of their responsibilities to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public.

BACKGROUND

RENEUCO had failed to issue the AR 2023 by the Due Date mainly due to unresolved audit issues with its external auditors, which led to a disclaimer of opinion on the AFS 2023 (Disclaimer Opinion), and consequently triggered the prescribed criteria in paragraph 2.1(d) of Practice Note 17 (PN17) upon issuance of the AR 2023 on 8 February 2024.

RENEUCO and its directors had failed to ensure sufficient appropriate audit evidence were provided to the external auditors to resolve the audit issues which had been raised to the Audit Committee on 12 October 2023 and despite the change of RENEUCO’s financial year end from 30 June 2023 to 30 September 2023 to accommodate the additional time required by the external auditors to finalise the AFS 2023.  In particular, there was a prolonged time taken to finalise and provide the Special Independent Review and Technical Due Diligence reports to the external auditors only on 23 & 24 January 2024 (despite the request on 12 & 26 October 2023) which had impeded the external auditors’ ability to complete the evaluation/assessment of the reports by the Due Date.  

The directors had also failed to undertake reasonable enquiries and assessments in allowing the delay in issuance of the AR 2023 during the Board meeting on 30 January 2024 despite their knowledge of the external auditors’ stand to issue the Disclaimer Opinion which would lead to the company triggering PN17, that there was no certainty to resolve the audit issues and basis for the Disclaimer Opinion in view of the limitations and insufficient appropriate audit evidence and the consequences of delay. 

There was no reasonable change of circumstances to justify the issuance of the AR 2023 only on 8 February 2024 where the Disclaimer Opinion remained in the AFS 2023.

In addition, RENEUCO had failed to undertake an assessment vis-à-vis the delay in issuance of the AR 2023 to ensure the requisite announcement that the company would not be able to issue its AR 2023 by the Due Date was made on or before 26 January 2024 in accordance with paragraph 9.28(3) of the MAIN LR.