The SC discovered, after approving the scheme, that the Sales Concession Agreement between Milan Auto (M) Sdn Bhd (MASB) -- the controlling shareholder of Energro -- and Fiat Auto S.p.A of Italy, had been terminated.

Without the agreement, which was central to the SC’s approval for the restructuring proposal, the SC considered the proposal to be no longer viable.

For Energro shareholders, the revocation means that Energro would not take over the listing status of Omega, and therefore Energro shares would not be listed on Bursa Malaysia Securities Berhad. The SC expects all parties to the restructuring scheme to immediately effect the SC’s revocation of approval, by taking all measures to restore the position to status quo prior to the SC’s approval.

As a matter of background, the SC granted its approval for the restructuring scheme of Omega on 28 August 2003. The scheme included the transfer of the listing status of Omega to Energro. Subsequent to the approval, the SC discovered that Energro did not have the core business it said it did.

To safeguard investors interest once investigations commenced, the SC, on 27 May 2004, requested Bursa Malaysia to defer the listing of the Energro shares. The SC is presently investigating into possible breaches of securities laws in relation to information submitted in connection with the restructuring scheme and disclosure in Energro’s prospectus.

To further safeguard investors’ interest, the SC has directed Energro and MASB to transfer monies raised from the restructuring exercise into trust accounts. The SC has also initiated civil enforcement action; amongst others, to restrain dealings with assets, and for restitution of monies to affected investors/subscribers.

The SC would like to caution all parties involved in undertaking corporate proposals to strictly adhere to high standards of disclosure, due diligence and corporate governance expected of them. The integrity of information and representation made in corporate proposals is central in a disclosure based regulatory regime. The SC views seriously any attempt to subvert a fair and orderly securities market, and would act against those who transgress the law.