SC reprimands Andrew Chan Kian Sang and Messrs Dass Mohamad Chartwell Brooke Hiller Parker Sdn Bhd, and imposes sanctions of non-acceptance of submission to the SC

Kuala Lumpur, 15 October 2003

The Securities Commission (SC) today publicly reprimanded, and imposed sanctions of non-acceptance of submission to the SC on valuer Andrew Chan Kian Sang and valuation firm Messrs Dass Mohamad Chartwell Brooke Hiller Parker Sdn Bhd (DMC), for one year, and three months, respectively for non-compliance with SC’s Guidelines on Asset Valuation for Submission to the Securities Commission.

Chan is a registered valuer and a director of DMC, and also the signatory for a valuation report submitted to the SC through AmMerchant Bank Berhad in conjunction with the restructuring exercise of Plantation and Development (Malaysia) Bhd (P&D) in 2002.

The valuation report submitted to the SC was found to have omitted material information on the sales comparables used in the valuation, and the valuation approach adopted for one of the parcels of land was inconsistent with the disclosure made in the report. The report also did not provide justification and explanation for certain assumptions used in the valuation. The property which was valued at RM745,000,000 by Chan involved several parcels of land totaling 1,648 acres in Ijok, Selangor.

In the public reprimand issued through the Press and posted on the SC website, the SC stated that the two were reprimanded and were imposed sanctions of non-acceptance to the SC for failure to exercise professionalism and failure to discharge due diligence responsibility expected of an expert in the preparation of the valuation report for submission to the SC.

“Experts such as valuers, accountants and lawyers, are professionally trained in their fields. They have the legal and moral obligation to exercise professionalism and due diligence as well as to take the necessary steps to ensure sufficiency and accuracy of the information disclosed and adopted when arriving at their expert opinions. Experts, before allowing their names to be identified with any opinion, must be satisfied that thorough evaluation and due diligence have been carried out and that their opinion can be justified,” said SC Chairman Datuk Ali Abdul Kadir.

He stressed that professionalism and due diligence are particularly important in a full disclosure based regime.

“Experts who take advantage of their status or fail to carry out due diligence in arriving at their opinions must be prepared to face the consequences as their actions cause grave harm to investors and the market as a whole. Such actions will not be tolerated and the SC will not hesitate to act against such transgressors,” the SC Chairman added.

Both Chan and DMC failed to provide satisfactory explanations to the SC on why action should not be taken against them when they were issued show cause letters.

PUBLIC REPRIMAND

ANDREW CHAN KIAN SANG (V342), A REGISTERED VALUER AND DIRECTOR OF VALUATION FIRM, DASS MOHAMAD CHARTWELL BROOKE HILLIER PARKER SDN BHD; AND
DASS MOHAMAD CHARTWELL BROOKE HILLIER PARKER SDN BHD (Board of Valuer Registration No: VE(1) 0048/3 and Company No: 448073 A)(DMC).

The Securities Commission (SC) today reprimands Andrew Chan Kian Sang, a registered valuer and the valuation firm Dass Mohamad Chartwell Brooke Hillier Parker Sdn Bhd for failure to exercise professionalism and failure to discharge due diligence responsibility expected of an expert in the preparation of a valuation report submitted to the SC by AmMerchant Bank Berhad in conjunction with the Restructuring Exercise of Plantation and Development (M) Berhad in 2002.

The valuation report involved several parcels of land totaling 1,648 acres located in Ijok, Selangor, valued at RM745,000,000 by Andrew Chan Kian Sang of DMC. Andrew Chan Kian Sang who signed the report is also a director of DMC. The said valuation report was found to be non-compliant with the Guidelines on Asset Valuations for Submission to the Securities Commission. The report submitted to the SC had omitted material information on the sales comparables used in the valuation, and the valuation approach adopted for one of the parcels is inconsistent with the disclosure made in the report. The report also did not provide justification and explanation for certain assumptions used in the valuation.

The SC also imposes the following sanctions on Andrew Chan Kian Sang and DMC with immediate effect:

Non acceptance of submission to the SC by Andrew Chan Kian Sang for a period of 12 months; and
Non acceptance of submission to the SC by DMC for a period of 3 months.

Show cause letter

DMC and Andrew Chan Kian Sang were issued show cause letters and given due opportunity to explain why action should not be taken against them. Their explanations were found to be unsatisfactory.

SECURITIES COMMISSION MALAYSIA