BURSA MALAYSIA PUBLICLY REPRIMANDS NGIU KEE CORPORATION (M) BERHAD AND THREE DIRECTORS, THE CHIEF EXECUTIVE OFFICER ALSO FINES RM100,000
| NGIU KEE CORPORATION (M) BERHAD |
LISTING'S CIRCULAR NO. L/Q : 64540 OF 2012
Bursa Malaysia Securities Berhad (Bursa Securities) has publicly reprimanded NGIU KEE Corporation (M) Berhad (NGIUKEE) and three of its directors for failing to take into account adjustments in the company’s announcement dated 30 July 2012 when it announced its fourth quarterly report for the financial year ended 31 March 2010 (4th QR 2010) on 26 May 2010. In addition, the Chief Executive Officer has been fined RM100,000.
The adjustments resulted in a 326% difference between the company’s audited and unaudited results and the failure to take the adjustments into account breached paragraph 9.16(1)(a) of the Main Market Listing Requirement (Main LR).
The following directors of NGIUKEE at the material time were found to be in breach of paragraph 16.13(b) of the Main LR for permitting knowingly, or where they had reasonable means of obtaining such knowledge, NGIUKEE to commit the breach:
| No. | Director | Penalty |
| 1. | Dato’ Haji Mohd Fauzi bin Yusuf Non-Executive Chairman Audit Committee Chairman (resigned on 29 April 2011) | Public Reprimand |
| 2. | Yong Siew Kat Executive Director / Chief Executive Officer | Public Reprimand and fine of RM100,000 |
| 3. | Dr. Ahmad Faisal bin Zakaria Executive Director (resigned on 3 June 2010) | Public Reprimand |
NGIUKEE is also required to carry out a limited review of its quarterly financial report submissions. The limited review must be performed by NGIUKEE’s external auditors for four quarterly financial reports commencing no later than the quarterly report for the financial period ended 31 March 2012. NGIUKEE is also required to ensure all its directors and the relevant personnel attend a training programme in relation to compliance with the Main LR particularly pertaining to financial statements.
The finding of breach and imposition of the above penalties on NGIUKEE 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 factors giving rise to and materiality of the deviation, the impact of the breach and in relation to the directors, the roles and responsibilities of the respective directors in the Company particularly pertaining to financial management, preparation and review of financial statements.
Bursa Securities views the above contravention seriously as listed companies are required to submit financial statements that are factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions.
BACKGROUND
On 26 May 2010, NGIUKEE reported an unaudited profit after tax and minority interest of RM2.580 million in its 4th QR 2010. However, on 30 July 2010, NGIUKEE announced an audited loss after tax and minority interest of RM5.833 million in its annual audited accounts for the financial year ended 31 March 2010. The difference of RM8.413 million between the unaudited and audited results for the financial year ended 31 March 2010 represented a variance of approximately 326%.
- impairment of the assets of NGIUKEE’s subsidiaries amounting to RM4.519 million; and
- allowance for damaged, obsolete and slow moving inventories of RM3.234 million.
The adjustments had resulted in the decrease of NGIUKEE’s shareholders equity from RM17,992,087 to RM12,190,814 (from 26.17% to 17.73% of NGIUKEE’s issued and paid-up capital of RM68,728,700) and triggered the criterion in paragraph 2.1(a) of Practice Note 17.
At the deliberation of NGIUKEE’s 4th QR 2010 on 26 May 2010, the external auditors had highlighted to the directors the following:-
i. certain investments in NGIUKEE’s subsidiaries might be impaired and the longer inventory turnover period; and
ii. it was recommended that the management conduct a more extensive review of NGIUKEE’s property, plant and equipment for impairment and make adequate allowance for stock obsolescence.
Announcement Info
| Company Name | NGIU KEE CORPORATION (M) BERHAD |
| Stock Name | NGIUKEE |
| Date Announced | 26 Apr 2012 |
| Category | Listing Circular |
| Reference No | HF-120426-65692 |