The stockbroking companies have been given two weeks to respond to the SC's show cause letters. During this period they are allowed to continue to conduct their business under the trading restrictions imposed by the Kuala Lumpur Stock Exchange (KLSE).

On 1 April 1998, the KLSE, upon a directive from the SC, had informed Capitalcorp, Kin Khoon, Labuan and MBf Northern that a restructuring exercise be effected by the company which may include an agreement in principle between the company and an acquirer which must be reached within a two-week period, ending 14 April 1998. None of the companies had submitted such agreement in principle on expiry date.

The abovementioned companies were put under trading restrictions because they were not able to fulfil prudential capital standards and business conduct standards of the securities laws and the KLSE Rules.

In all decisions made by the SC, investor protection and management of systemic risk are given the utmost priority. The SC, working closely with the KLSE, undertakes to ensure that clients' assets will be safeguarded. The SC has also instructed the KLSE to be on hand to address any concerns clients of Capitalcorp, Kin Khoon, Labuan and MBf Northern may have. Investors may contact the KLSE helpline at tel no 206 3518 for enquiries or assistance.

Status of stockbroking companies placed under trading restriction in February 1998

Meanwhile, the deadline set for three stockbroking firms (MGI Securities Sdn Bhd, Omega Securities Sdn Bhd and Alor Setar Securities Sdn Bhd) placed under restricted trading in February 1998 to present an acceptable plan to regularise their financial position before 15 April 1998, lapses today.

With effect from tomorrow these companies will be given two weeks to submit to the SC an agreement in principle to merge or be acquired by a third party and within six weeks thereafter the agreement must be finalised.