Administrative Actions in 2018
No. Nature of Misconduct Parties Involved Brief description of misconduct Action Taken

Date of Action

1. Breach of Sections 65(1)(g)(v) and (l) of the Capital Markets and Services Act 2007 (“CMSA”):

  • For conducting himself in such a way as to cast doubt on his competence and soundness of judgement; and
  • the SC has reason to believe that the holder of the Capital Markets Services Representative’s Licence (“CMSRL”) will not carry on the regulated activity for which he is licensed for efficiently, honestly or fairly
Shaiful Nazren bin Kassim (“Shaiful”), a holder of a CMSRL carrying out the regulated activity of dealing in securities
  1. Conducted discretionary trading on the accounts of three (3) of his clients without obtaining prior approval from the senior management of his stockbroking company;
  2. Traded excessively on several of his clients’ accounts which generated substantial brokerage income for himself while causing the said clients losses over a four-year period;
  3. Failed to fulfil a client’s requests, including instructions for withdrawal of monies from her accounts as well as queries into account status and balance; and
  4. Failed to exercise due care and diligence by affiliating himself with AAM Academy and Akademi Saham Malaysia, which had disseminated marketing materials containing misleading representations to the effect that investing in shares is capital protected with guaranteed returns.
Revocation of Shaiful’s CMSRL for dealing in securities under Section 72(2)(b)(i) of the CMSA 18 June 2018
Breach of Section 356(1)(a) of the CMSA read together with:

  • Section 61(4) of the CMSA for failure to comply with the condition of his CMSRL, which requires him to remain fit and proper at all times as provided under Paragraph 7.03(1) of the SC’s Licensing Handbook; and
  • Paragraph 7.0(a) of the Guidelines on Market Conduct and Business Practices for Stockbroking Companies and Licensed Representatives for conducting discretionary trading on the accounts of clients without obtaining prior approval from the senior management of his stockbroking company.
Penalty of RM123,750
2. Breach of Section 354(1)(b)(ii) of the Capital Market and Services Act 2007 (“CMSA”) read together with Paragraph 4.17, Section B, Part 1 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (“LOLA Guidelines”). MTC Asset Management (M) Sdn Bhd (“MTC”), a holder of a Capital Market Services Licence for fund management Delay of 2 business days in submitting the monthly statistical returns of a wholesale fund. SC imposed a penalty of RM2,000 against MTC. 11 June 2018
3. Breach of Section 356(1)(a) of the CMSA read together with Paragraphs 4.17 and 4.18(e), Section B, Part 1 of the LOLA Guidelines. AmFunds Management Berhad (“AmFunds”), a holder of a Capital Market Services Licence for dealing in securities restricted to unit trust, fund management and dealing in Private Retirement Scheme Delay of 1 business day in submitting the monthly statistical returns of 2 wholesale funds. SC imposed a penalty of RM2,000 against AmFunds. 11 June 2018
4. AmIslamic Funds Management Sdn Bhd (“AmIslamic”), a holder of a Capital Market Services Licence for fund management Delay of 1 business day in submitting the monthly statistical returns of a wholesale fund. SC imposed a penalty of RM1,000 against AmIslamic. 11 June 2018
5. RHB Asset Management Sdn Bhd (“RHB Asset Management”), a holder of a Capital Markets Services Licence for dealing in securities restricted to unit trust, fund management, dealing in Private Retirement Scheme and investment advice Delay of 1 business day in submitting the monthly statistical returns of 3 wholesale funds. SC imposed a penalty of RM3,000 against RHB Asset Management. 11 June 2018
6. Breach of section 354(1)(a) of the Capital Markets and Services Act 2007 (“CMSA”) read together with Regulation 4(1) of the Securities Industry (Compliance with Approved Accounting Standards) Regulation 1999 (“SIR”) NetX Holdings Berhad (NetX) Failure to comply with the relevant Malaysian Financial Reporting Standards (“MFRS”) in relation to NetX’s Audited Financial Statements for the financial years ended 30 June 2014 (“AFS 2014”) and 30 June 2015 (“AFS 2015”).

 

Reprimand 5 June 2018
7. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR YM Tengku Ahmad Badli Shah bin Raja Hussin Failure to comply with the relevant MFRS in relation to NetX’s AFS 2015 Reprimand 5 June 2018
8. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Tan Sik Eek Failure to comply with the relevant MFRS in relation to NetX’s AFS 2015 Reprimand 5 June 2018
9. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Chu Chee Peng Failure to comply with the relevant MFRS in relation to NetX’s AFS 2015 Reprimand 5 June 2018
10. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Yong Ket Inn Failure to comply with the relevant MFRS in relation to NetX’s AFS 2015 Reprimand 5 June 2018
11. Breach of section 354(1)(a) of the Capital Markets and Services Act 2007 (“CMSA”) read together with Regulation 4(1) of the Securities Industry (Compliance with Approved Accounting Standards) Regulation 1999 (“SIR”) Khee San Berhad (“Khee San” or the “Company”) Failure to comply with the relevant Malaysian Financial Reporting Standards (“MFRS”) in relation to Khee San’s Audited Financial Statements for the financial years ended 30 June 2015 (“AFS 2015”) and 30 June 2016 (“AFS 2016”).
(1) Reprimand;
(2) Directs Khee San to rectify and re-issue Khee San’s AFS 2015 and AFS 2016 as follows:

(a) Khee San shall appoint an external Auditor (who is registered with the Audit Oversight Board (“AOB)) acceptable to the SC to re-audit the entire AFS 2015 and AFS 2016 (“Re-audit of AFS 2015 & AFS 2016”);

(b) Based on the findings of the re-audit of AFS 2015 and AFS 2016, Khee San is to rectify and re-issue the AFS 2015, AFS 2016 and all quarterly results and audited financial statements issued subsequent to AFS 2016 (“Restatement of Accounts”);

(c) The Re-audit of AFS 2015 & AFS 2016 and Restatement of Accounts is to be completed by KHEESAN within six (6) months from 21 May 2018.

(3) Directs Khee San to seek appropriate independent professional advice to reconstitute an effective Audit Committee (“AC”) as follows:

(a) Khee San shall consult and appoint an independent consultant for an assessment of the effectiveness of Khee San’s current AC, particularly on the level of knowledge, skills, expertise and commitment of the AC members in discharging its responsibilities effectively and make appropriate recommendations (“Assessment of the AC”);

(b) Khee San’s Board of Directors shall assess the findings on the Assessment of AC and take appropriate steps;

(c) Khee San shall highlight in its next audited financial statements and announce to Bursa Malaysia Securities Berhad (“Bursa”) the appropriate action the Company has taken in addressing the SC’s directive; and

(d) The Assessment of the AC must be completed by KHEESAN within three (3) months from the completion of the Restatement of Accounts.

(4) Directs Khee San to address its Financial Reporting Function as follows:

(a) Khee San shall appoint an external Auditor (who is registered with the AOB) to evaluate the adequacy of the scope, functions, competency and resources of Khee San’s financial reporting function and make the appropriate recommendation to improve Khee San’s Financial Reporting Function (“Assessment of Financial Reporting Function”);

(b) Khee San’s Board of Directors shall assess the external Auditor’s findings on the Assessment of Financial Reporting Function and take appropriate steps;

(c) Khee San shall highlight in its next audited financial statements and announce to Bursa (upon completion of the following remedial action) the following:

  • the appropriate action the Company has taken, given the CMSA breaches highlighted above; and
  • the actions that the Board of Directors has taken in addressing the SC’s directive in relation to the CMSA breaches highlighted above.
(5) The directive to address the Financial Reporting Function must be completed by KHEESAN within 3 months from Re-audit and re-issuance of accounts.
21 May 2018
12. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Dato’ Sri Liew Kuek Hin Failure to comply with the relevant MFRS in relation to Khee San’s AFS 2015 and AFS 2016.
  • Reprimand;
  • Penalty of RM 196,000 for breaches with respect to AFS 2015;
  • Penalty of RM196,000 for breaches with respect to AFS 2016
21 1May 208
13. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Huang Yan Teo Failure to comply with the relevant MFRS in relation to Khee San’s AFS 2015 and AFS 2016.
  • Reprimand;
  • Penalty of RM 196,000 for breaches with respect to AFS 2015;
  • Penalty of RM196,000 for breaches with respect to AFS 2016
21 May 2018
14. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Leslie Looi Meng Failure to comply with the relevant MFRS in relation to Khee San’s AFS 2015 and AFS 2016.
  • Reprimand;
  • Penalty of RM 196,000 for breaches with respect to AFS 2015;
  • Penalty of RM196,000 for breaches with respect to AFS 2016
21 May 2018
15. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Dato’ Sri Liew Yew Chung Failure to comply with the relevant MFRS in relation to Khee San’s AFS 2015 and AFS 2016.
  • Reprimand;
  • Penalty of RM 171,500 for breaches with respect to AFS 2015;
  • Penalty of RM171,500 for breaches with respect to AFS 2016
21 May 2018
16. Breach of section 354(1)(a) of the CMSA read together with Regulation 4(1) of the SIR Liew Yet Mei Failure to comply with the relevant MFRS in relation to Khee San’s AFS 2015 and AFS 2016.
  • Reprimand;
  • Penalty of RM 171,500 for breaches with respect to AFS 2015;
  • Penalty of RM171,500 for breaches with respect to AFS 2016
21 May 2018
17. Breach of Section 354(1)(b)(ii) of the Capital Market and Services Act 2007 (“CMSA”) read together with Paragraphs 4.05 and 4.06, Section B, Part 2 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (“LOLA Guidelines”). HSBC Bank Malaysia Berhad (“HSBC Bank”) Delay of 1 business day in submitting the post-issuance reports of 8 structured product programmes. SC imposed a penalty of RM8,000 against HSBC Bank. 5 February 2018
18. HSBC Amanah Malaysia Berhad (“HSBC Amanah”) Delay of 1 business day in submitting the post-issuance report of a structured product programme. SC imposed a penalty of RM1,000 against HSBC Amanah. 5 February 2018
19. Breach of Section 356(1)(a) of the CMSA read together with Paragraphs 4.17 and 4.18(e), Section B, Part 1 of the LOLA Guidelines. Muamalat Invest Sdn Bhd (“Muamalat Invest”), a holder of Capital Market Services License for fund management. Delay of 1 business day in submitting the monthly statistical returns of a wholesale fund. SC imposed a penalty of RM1,000 against Muamalat Invest. 5 February 2018

Note: All administrative actions taken by the Securities Commission are subject to the aggrieved person’s right to appeal to the Commission for a review of the decision under section 146 of the Securities Commission Act 1993 or section 364 of the Capital Markets & Services Act 2007 within 30 days of the decision at first instance.