Administrative Actions in 2018
No. Nature of Misconduct Parties Involved Brief description of misconduct Action Taken Date of Action
1. Breach of section 354(1)(a) of the Capital Markets and Services Act 2007 (“CMSA”) read together with section 215(3)(a)(b)(i) of the CMSA (“Breach 1”)

Breach of section 354(1)(b)(ii) of the CMSA read together with Paragraph 3.05(c) of the Guidelines On Due Diligence Conduct For Corporate Proposals (“DDGL”) (“Breach 2”)

Lotte Chemical Titan Holding Berhad (“LCT” or the “Company”) Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.

Failure to inform its Principal Adviser of the Material Developments which may have an impact on the corporate proposal for its listing.

  • Reprimand and Penalty of RM280,000 for Breach 1;
  • Reprimand and Penalty of RM280,000 for Breach 2.

LCT has applied for the SC to review its decision against them.

9 July 2018
2. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) and Section 367(1) of the CMSA

 

Tan Sri Dato’ Abdul Rahman Bin Mamat Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.

 

  • Reprimand

Tan Sri Dato’ Abdul Rahman Bin Mamat has applied for the SC to review its decision against him.

9 July 2018
3. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) and section 367(1) of the CMSA (“Breach 1”)

Breach of section 354(1)(b)(ii) of the CMSA read together with Paragraph 3.05(c) of the DDGL (“Breach 2”)

Lee Dong Woo Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.

Failure to inform its Principal Adviser of the Material Developments which may have an impact on the corporate proposal for its listing.

  • Reprimand and Penalty of RM220,500 for Breach 1;
  • Reprimand and Penalty of RM220,500 for Breach 2.

Lee Dong Woo has applied for the SC to review its decision against him.

9 July 2018
4. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) and section 367(1) of the CMSA (“Breach 1”)

Breach of section 354(1)(b)(ii) of the CMSA read together with Paragraph 3.05(c) of the DDGL (“Breach 2”)

 

Lee Kwan Ho Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.

Failure to inform its Principal Adviser of the Material Developments which may have an impact on the corporate proposal for its listing.

  • Reprimand and Penalty of RM220,500 for Breach 1;
  • Reprimand and Penalty of RM220,500 for Breach 2.

Lee Kwan Ho has applied for the SC to review its decision against him.

9 July 2018
5. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) and Section 367(1) of the CMSA

 

Cho Seongtaeg Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.
  • Reprimand

Cho Seongtaeg has applied for the SC to review its decision against him.

9 July 2018
6. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) and Section 367(1) of the CMSA

 

Tan Sri Datuk (Dr) Rafiah Binti Salim Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.
  • Reprimand

Tan Sri Datuk (Dr) Rafiah Binti Salim has applied for the SC to review its decision against her.

 

9 July 2018
7. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) and Section 367(1) of the CMSA

 

Ang Ah Lek Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.

 

  • Reprimand

Ang Ah Lek has applied for the SC to review its decision against him.

9 July 2018
8. Breach of section 354(1)(a) of the CMSA read together with section 215(3)(a)(b)(i) of the CMSA

 

Ernst & Young (“EY”) Failure to inform the SC of material developments to LCT (“Material Developments”) prior to its listing on the Main Market of Bursa Malaysia.  The Material Developments related to LCT’s financial performance subsequent to 1st quarter 2017, which was relevant to LCT’s corporate proposal. These Material Developments arose after LCT’s Prospectus was submitted to the SC but prior to its listing.
  • Reprimand;
  • Penalty of RM297,500; and
  • Directs EY to do the following:-
    • conduct a comprehensive review and assessment for adequacy of all policies and processes relating to EY’s role as an Adviser and Expert (Reporting Accountant) (as  prescribed in Paragraphs 3.20 to 3.23 of the DDGL). The results of such review and assessment together with recommendations (if any) must be reported to the SC within three (3) months from 9 July 2018; and
    • table the SC’s decision at a meeting of EY’s Risk Committee or equivalent  and a copy of the minutes of the meeting together with the relevant committee papers discussing the issues must be forwarded to the SC within one (1) month from 9 July 2018.

Ernst & Young (“EY”) has applied for the SC to review its decision against them.

9 July 2018
9. Breach of section 354(1)(b)(ii) of the Capital Markets and Services Act 2007 (“CMSA”) read together with Paragraphs 3.03 and 3.08 of the DDGL

 

Maybank Investment Bank Berhad (“Maybank IB”) Failure to carry out appropriate due diligence in order to assess the state of LCT’s financial performance subsequent to 1st quarter 2017 that may impact the accuracy of the statements in LCT’s Prospectus.
  • Reprimand;
  • Penalty of RM450,000; and
  • Directs Maybank IB to do the following:-
    • conduct a comprehensive review and assessment for adequacy of conduct a comprehensive review and assessment for adequacy of all policies and processes relating to Maybank IB’s role as Principal Adviser or sponsor for corporate proposals (as defined in Paragraphs 3.08 to 3.19 of the DDGL). Results of such review and assessment together with recommendations (if any) must be reported to the SC within three (3) months from 9 July 2018; and
    • table the SC’s decision at a meeting of the Board of Directors of Maybank IB and a copy of the minutes of meeting together with the relevant Board papers discussing the issues must be forwarded to the SC within one (1) month from 9 July 2018.

Maybank IB has applied for the SC to review its decision against them.

 

9 July 2018
10. Breach of Section 354(1)(a) read together with Section 59(1) of the Capital Markets and Services Act 2007 (“CMSA”) for holding out as a holder of Capital Markets Services Representative’s Licence for dealing in securities Raja An Nurum Muhammadun Jamil Iqbal bin Mohamed @ Mohd Beta, sole proprietor of Mthreepttwo Rich Resources Holding out as a holder of Capital Markets Services Representative’s Licence for dealing in securities
  • Reprimand
  • Penalty of RM50,000.00
9 July 2018
11. Breach of section 354(1)(a) of the Capital Markets and Services Act 2007 (“CMSA”) read together with section 369(b)(B) of the CMSA Multi Sports Holdings Berhad (“Multi Sports”) Knowingly causing the furnishing of Multi Sports’ financial statements that is false or misleading to Bursa Malaysia. The financial statements concerned were Multi Sports’ Condensed Consolidated Statement of Financial Position as at 31 March 2015 (“1Q 2015”) until Condensed Consolidated Statement of Financial Position as at 31 March 2016 (“1Q 2016”) Reprimand 27 June 2018
12. Breach of section 354(1)(a) of the CMSA read together with section 369(b)(B) of the CMSA (“Breach 1”)

Breach of section 354(1)(a) of the CMSA read together with section 137(1) of the Securities Commission Malaysia Act 1993 (“SCMA”) for failure to comply with a section 152(1) Notice of the SCMA (“Breach 2”)

Lin Huozhi Knowingly authorising the furnishing of Multi Sports’ financial statements that is false or misleading to Bursa Malaysia. The financial statements concerned were Multi Sports’ 1Q 2015 until 4Q 2015.

Failure to provide any response to the Section 152 Notice which was sent by the SC to Lin Huozhi.

 

  • Reprimand
  • The SC has issued a public statement to the effect that, in the SC’s opinion, the retention of office by Lin Huozhi as a Director of Multi Sports is prejudicial to the public interest

 

27 June 2018
13. Breach of section 354(1)(a) of the CMSA read together with section 369(b)(B) of the CMSA (“Breach 1”)

Breach of section 354(1)(a) of the CMSA read together with section 137(1) of the Securities Commission Malaysia Act 1993 (“SCMA”) for failure to comply with a section 152(1) Notice of the SCMA (“Breach 2”)

Lin Liying Knowingly authorising the furnishing of Multi Sports’ financial statements that is false or misleading to Bursa Malaysia. The financial statements concerned were Multi Sports’ 1Q 2015 until 4Q 2015.

Failure to provide any response to the Section 152 Notice which was sent by the SC to Lin Liying.

 

  • Reprimand
  • The SC has issued a public statement to the effect that, in the SC’s opinion, the retention of office by Lin Liying as a Director of Multi Sports is prejudicial to the public interest

 

27 June 2018
14. Breach of section 354(1)(a) of the CMSA read together with section 369(b)(B) of the CMSA

 

Wong Wang Lam Knowingly ­­authorising the furnishing of Multi Sports’ financial statements that is false or misleading to Bursa Malaysia. The financial statements concerned were Multi Sports’ 1Q 2015 until 4Q 2015.

 

  • Reprimand
27 June 2018
15. 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
16. 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
17. 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
18. 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
19. 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
20. 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
21. 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
22. 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
23. 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
24. 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
25. 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
26. 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
27. 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
28. 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
29. 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
30. 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
31. 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
32. 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
33. 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
34. 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.