KUALA LUMPUR (Dec 10): The Court of Appeal has set aside the High Court decision in 2020 to quash the enforcement actions of the Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) against audit firm Afrizan Tarmili Khairul Azhar (AFTAAS) and its three partners.

The ruling in favour of the SC was made on Friday, the commission said in a statement.

The ruling means that the one-year ban from August 2019 executed by the AOB on AFTAAS and its partners from auditing and accepting clients remains in effect, SC said in a statement.

The partners are Datuk Mohd Afrizan Husain, Tamili Dulah Kusni and Khairul Azahar Ariffin.

“AFTAAS was sanctioned by the AOB for several breaches involving non-compliance with the auditing standards on fundamental and basic audit procedures,” the SC said.

“The AOB also found that some of the findings were recurring from the AOB’s previous inspection on AFTAAS, raising concerns on the capacity and capability of the firm.

“The firm and its partners were prohibited from accepting as clients and auditing public interest entities (PIE) or schedule funds for a period of 12 months,” the regulator added.

In addition, the AOB also imposed fines of RM455,000 on AFTAAS, and RM88,000 each on Datuk Mohd Afrizan and Khairul respectively.

“The decision of the Court of Appeal reinforces the robustness of the AOB’s enforcement framework and its processes,” the SC said.

AFTAAS sought close to RM35 million in damages from SC, after the High Court set aside SC's sanctions on the firm for alleged non-compliance of auditing standards.

The firm, in its claim, said that as a result of the AOB decision, it had lost many clients which it had built since 2000 such as Supermax Corp, Seacera Group Bhd, Mentiga Corp Bhd, and Alam Maritim Resources Bhd.