2. JTH had, on 14 March 1996, released an announcement pertaining to its corporate proposal involving the acquisition of 11 timber concessions consisting of 9 timber licensee companies and 2 new timber licences, restricted issue and rescission of a log supply agreement.

3. At the time of consideration, the SC discovered that the offer for the purchase was in fact made to the vendors of the target companies on 20 November 1995, ie. about three and a half months before the release of the said announcement. The proposed price of JTH shares to be issued as satisfaction to the purchase consideration had then been determined at RM8.00 per share. The said proposed issue price had been arrived at after taking into consideration the three-month weighted average market price of JTH shares from 21 August 1995 to 20 November 1995 (of RM8.49) and the closing market price on 20 November 1995 (of RM6.20).

4. When the terms of the proposed acquisition were announced on 14 March 1996, the SC noted that the proposed price of JTH shares to be issued for the acquisition was fixed at RM8.00 per share even though the prices of JTH shares had increased significantly prior to the announcement. The three-month weighted average market price of JTH shares from 9 December 1995 to 8 March 1996, the date prior to suspension of the traded shares, was RM11.34 and the closing market price on 8 March 1996 was RM14.10.

5. Under the SC's Guidelines as well as the Listing Requirements of the Kuala Lumpur Stock Exchange, public companies are required to make immediate public announcement of all material information concerning their affairs. Immense importance is placed on immediate disclosure of information where the information is likely to have a significant effect on the price of a company's securities. This is to ensure the maintenance of a fair and transparent securities market and all investors have simultaneous and equal access to the same information. In this regard, JTH had failed to make a public announcement of the proposed acquisition at the time when the offer was made to the vendors.

6. JTH was given due opportunity to explain their failure to comply with the SC's Guidelines on corporate disclosure. The explanations provided by the Board of Directors of JTH have been found to be unsatisfactory.

7. The SC views seriously the above shortcoming of JTH given SC's commitment in promoting disclosure-based regulatory environment and investors' protection through the maintenance of high disclosure standards by public companies.

8. Public companies and their principal officers are expected to comply with all the laws, regulations and Guidelines applicable to them. Directors of public companies must ensure at all times that their fiduciary duties are discharged in a responsible and professional manner, with due care and dilligence. This is important to uphold market integrity and to ensure that the interests of investors at large and minority shareholders are well served. The SC will not hesitate to take action against transgressors under the securities laws and relevant provisions of the Securities Commission Act 1993 (Amended) should there be a need to do so.