2. Olympia was granted approval for its rights issue exercise on 8 November 1994 subject to the conditions, amongst others, that the proceeds be utilised for the Group's major development projects including a land reclamation project, Majlis Perbandaran Petaling Jaya privatisation project and development of a budget hotel, acquisition of computer systems as well as working capital requirements for the Group's subsidiaries. On 31 October 1996, Olympia submitted an application to redeploy a major part of the proceeds for the acquisition of an office property known as Plaza Raja Chulan. Olympia represented to the SC that the rights issue proceeds totalling RM243 million had been placed in fixed deposit accounts while awaiting the SC's approval on the revision of the utilisation of proceeds. In the course of reviewing Olympia's application, the SC discovered that the proceeds had in actual fact been redeployed within the Olympia Group for working capital purposes. Olympia had thus breached one of the SC's conditions of approval by utilising the rights issue proceeds for purposes other than those already approved. The SC views seriously such non-adherence of a condition of approval. The SC expects all conditions imposed on approvals of corporate proposals to be fully adhered to by the applicant companies concerned.

3. Olympia had also breached the SC Guidelines on implementation of corporate proposals which require rights issue proceeds to be fully utilised within a period of 18 months from SC's approval. In this regard, Olympia had left the allowable period for the utilisation of the proceeds to lapse without first seeking the SC's approval for an extension of time. Under the SC Guidelines, an application for an extension of time for implementing corporate proposals must be made not later than 14 days before the expiry date of the relevant approval, which in this case was on 8 May 1996. Olympia submitted an application for a revision in the utilisation of rights issue proceeds only on 31 October 1996 and the application submitted was incomplete as the necessary valuation reports to support their application were only received on 27 January 1997.

4. Olympia was given due opportunity by the SC, via a show-cause letter dated 7 April 1997, to explain their failure to comply with the SC's Guidelines on timely application for an extension of time and for the failure to furnish documentary proof to support its claims that the proceeds were kept in the fixed deposit accounts. Olympia's explanations, via a letter dated 21 April 1997, have been found to be unsatisfactory. Olympia had also failed to satisfactorily explain to the SC the reasons for not adhering to the utilisation of proceeds as originally approved.

5. The SC places great importance on corporate governance by public companies and their Directors as well as the compliance by public companies of the terms and conditions imposed by the SC in its approval of any corporate proposal. Directors of public companies are under a duty to ensure the fulfilment of these conditions as they are imposed to safeguard investors' interest. Under the Securities Commission Act 1993, the SC is empowered to revoke approval previously given for a corporate proposal for non-compliance of any material term or condition stipulated by the SC. Having considered the explanations submitted by Olympia and the circumstances of the case, the SC has decided to issue this public reprimand to Olympia and its Board of Directors for the said breaches.