Undercapitalised PLCs get extension to meet minimum paid-up capital requirement

Kuala Lumpur, 3 December 2002

The Securities Commission (SC) today announced that the deadline for undercapitalised companies listed on the Kuala Lumpur Stock Exchange (KLSE) to meet the minimum RM60 million and RM40 million paid-up capital requirement (for the Main Board and Second Board respectively) has been extended by another one year from 31 December 2002 to 31 December 2003.

The deadline to meet the minimum paid-up capital requirement was reviewed and extended in the light of several factors, among others, the weak market conditions which made it difficult for listed companies to undertake capital-raising exercises as well as the feedback and applications for extension of time from undercapitalised companies.

Undercapitalised listed companies are reminded that if they still fail to meet the minimum paid-up capital requirement by the new deadline of 31 December 2003, they will be classified under a separate sector by KLSE and tagged as “Undercapitalised”. Such companies may also be imposed with trading restrictions.

Undercapitalised listed companies are also reminded of their obligation to keep shareholders and investors informed of their non-compliant status through their quarterly financial results.

In addition, the SC wishes to emphasise that, as highlighted in the SC’s previous press release dated 26 November 2001, it will only consider corporate proposals by undercapitalised companies if their proposals would increase their paid-up capital to the minimum level.

As at 29 November 2002, 140 of the companies listed on KLSE have yet to achieve the minimum paid-up capital requirement. (The full list of undercapitalised listed companies is attached in the Appendix)

The SC stressed that the deadline extension applies solely to undercapitalised listed companies that have yet to fulfill the minimum paid-up capital requirement. There is no extension of deadline for PN4 companies (companies that have been classified under KLSE’s Practice Note 4) to regularise their financial position.


Note to Editor

The RM60 million and RM40 million paid-up capital requirement for companies listed on the Main Board and the Second Board of the Kuala Lumpur Stock Exchange (KLSE) respectively, was introduced by the Securities Commission (SC) in early 1999 to increase the free float and liquidity of shares of companies listed on the KLSE. Prior to 1999, the minimum paid-up capital requirement for listed companies on the Main Board and the Second Board of the KLSE were RM50 million and RM10 million, respectively. Listed companies were originally given a time frame of three years until the end of April 2002 to comply with the minimum share-capital requirement. The deadline was later extended from April 2002 to December 2002 which was announced during the Budget 2002 speech by the Prime Minister.

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