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

Bursa Malaysia Securities Berhad [Registration No.: 200301033577 (635998-W)] (Bursa Malaysia Securities) has publicly reprimanded Meridian Berhad (MERIDIAN) and 5 of its directors for breach of the Bursa Malaysia Securities Main Market Listing Requirements (MAIN LR).  In addition, the 5 directors were imposed total fines of RM350,000. 

MERIDIAN was publicly reprimanded for breach of paragraph 8.03A(3)(a) read together with paragraphs 8.03A(2)(b) and 8.03A(7)(b) of the MAIN LR for failing to make an immediate announcement that the company had an insignificant business or operations (First Announcement) upon announcement of the unaudited quarterly report for the financial period ended (FPE) 30 June 2023 (QR4 2023) on 29 August 2023.

In this regard, MERIDIAN had an insignificant business or operations based on the QR4 2023 where the company’s revenue of RM2.738 million on a consolidated basis represented 0.93% of the company’s share capital of RM294.021 million as at 30 June 2023.

MERIDIAN only made the First Announcement on 26 September 2023, after a delay of 28 days.

5 directors of MERIDIAN at the material time had breached paragraph 16.13(b) of the MAIN LR for permitting MERIDIAN to commit the breach for which the following penalties were imposed on them: - 

The finding of breach and imposition of the above penalties on MERIDIAN 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 MERIDIAN and its shareholders/investors, and the roles, responsibilities, knowledge and conduct of the directors.  

Bursa Malaysia Securities views the breach seriously where the First Announcement was crucial to shareholders and investors as it related to MERIDIAN’s level of operation to warrant continued trading or listing on the Official List. There would be possible suspension and de-listing if MERIDIAN fails to regularise its level of operations within the timeframes prescribed in paragraph 8.03A of the MAIN LR. Hence, information pertaining to triggering of paragraph 8.03A of the MAIN LR is significant to the market and timely disclosure is important towards facilitating informed investment decision.

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

BACKGROUND

MERIDIAN had an insignificant business or operations based on the QR4 2023 where the company’s revenue of RM2.738 million on a consolidated basis represented 0.93% of the company’s share capital of RM294.021 million as at 30 June 2023.

However, MERIDIAN only made the First Announcement on 26 September 2023 i.e. a delay of 28 days and after Bursa Malaysia Securities’ engagement with the company on 25 September 2023.

There was no reasonable explanation for MERIDIAN’s failure to make the First Announcement upon announcement of the QR4 2023.  Paragraph 8.03A(7)(b) of the MAIN LR clearly defined “insignificant business or operations” to mean business or operations which generates revenue on a consolidated basis that represents 5% or less of the share capital of the listed issuer (5% Threshold) based on its latest annual audited or unaudited financial statements.  In this respect, MERIDIAN’s latest annual financial statements were the QR4 2023 announced on 29 August 2023 which reported a revenue of RM2.738 million for the 12 months period ended 30 June 2023 and clearly below the 5% Threshold.  The subsequent change of MERIDIAN’s financial year end from 30 June 2023 to 30 November 2023 which was announced on 27 October 2023 did not unwind or negate the fact that the company had triggered paragraph 8.03A(2)(b) of the MAIN LR on 29 August 2023 based on the QR4 2023 and was required to make the First Announcement.

The directors had failed to discharge their duties to undertake reasonable assessment and enquiry to ascertain the triggering criteria under paragraph 8.03A(2)(b) of the MAIN LR and ensure the First Announcement was made despite their knowledge of the following during the Audit Committee and/or Board meetings on 24 May 2023 and 26 August 2023: -

• The company secretary had advised the Audit Committee and Board of the obligations under paragraph 8.03A of the MAIN LR.

• The directors had approved the QR4 2023 which reported the Group’s revenue of less than the 5% Threshold. However, there was no further mention/deliberation/approval by the Board to make the First Announcement.  There was also no reasonable basis for the impression/assumption of MERIDIAN and the directors that the company’s revenue would increase from 0.93% for the FPE 30 June 2023 to meet the 5% Threshold for the FPE 30 November 2023.  In fact, MERIDIAN had only reported a revenue of RM3,796 million which represented 1.29% of the company’s share capital for the FPE 30 November 2023.