Page 38 - SC SCAR 2023 ENGLISH Flipbook

PART 2 REGULATORY PERFORMANCE AND OUTCOMES
professionals of the PLCs involved for further fact- finding. These engagements also served to remind directors of the need to consistently act in the best interest of the companies and their shareholders.
The surveillance reviews undertaken highlighted some concerns relating to disclosures, utilisation of funds raised and the application of financial reporting standards. Where irregularities or possible securities law breaches were detected, they were escalated for formal investigation and/or enforcement action. Where relevant, Bursa Malaysia was also engaged in matters requiring closer scrutiny on their part as the frontline regulator.
In 2023, the SC strengthened its surveillance approach, targeting specific areas of concern for review, resulting in more effective and efficient detection of potential misconduct. As a result of a more targetted approach, 166 reviews of potential corporate misconduct were completed (2022: 317 reviews), with eight cases being referred for formal investigation (2022: 4 cases).
Fostering Compliance with Take-over and Merger Regulations
As part of its mandate, the SC also closely monitors compliance with the take-over requirements to detect misconduct and breaches which could jeopardise the interests of the investing public. In 2023, the SC had imposed sanctions comprising a directive to sell down shares, penalty of RM500,000 and reprimand against certain parties for failure to undertake a mandatory take-over offer following the acquisition of shares which exceeded the creeping threshold, i.e. exceeded 2.0% of the voting shares within a period of six months. In addition, the SC had also issued Infringement Notices for other non-compliances detected including for submitting the application for exemption after the mandatory offer obligation was already triggered and non-compliances relating to dealings in securities during the offer period and/or disclosure of information to the SC (Table 17).
TABLE 17
Surveillance outcomes
Note:
* Statistics also reflected under the SC’s administrative actions (Table 25)
and Infringement Notices (Table 26).
Further, the SC seeks to pre-empt major issues in take- overs and other relevant transactions by encouraging early consultation to clarify the application of the Code/ Rules governing such transactions. In 2023, consultations with the SC involved diverse aspects of take-over regulations including on ultimate offeror, joint offeror and concert party matters, triggering of the mandatory offer obligation and eligibility for exemption, conditions and pre-conditions to offers, favourable deals and frustration of offers, restrictions following offers and possible offers, disqualifying transactions in relation to whitewash procedures and other general enquiries. Through the consultation process, the SC fostered a conducive environment for the SC to provide relevant clarifications and guidance, with the aim to enhance stakeholders’ adherence to the regulatory requirements for take-over and merger transactions.
During 2023, the SC and Bursa Malaysia also conducted several dialogues with the board of directors of companies to be listed on the Main Market or the ACE Market on pertinent requirements to be observed by listed companies, including the key take-over regulations, prior to the companies’ listing. This initiative served as crucial forums for disseminating essential regulatory requirements and promoting a better understanding among newly listed companies.
Apart from the SC’s interaction with advisers during the review of applications or consultations, the SC also engaged practitioners to discuss complex issues and to clarify expectations on compliance with take-over requirements. On 28 July 2023, a focus group meeting was held between the SC, Bursa Malaysia and 20 participating legal firms to discuss various corporate finance and investment-related matters, including take- overs and mergers. Further, on 5 October 2023, the SC hosted a dialogue on current take-over and merger issues, which was attended by representatives from 26 advisory firms and the Malaysian Investment Banking Association (MIBA). These engagements enabled the SC to remain vigilant and stakeholder-focused in ensuring that the regulation of take-over activities in Malaysia remains aligned with the evolving market landscape.
In summary, the SC’s multifaceted approach involving proactive monitoring, consultations, educational dialogues and practitioner engagements demonstrates its commitment in maintaining a fair and well-regulated marketplace in Malaysia and underscores its effectiveness in regulating take-over activities.
Surveillance outcomes
2023
2022
Administrative actions*
1
2
Infringement Notices*
5
5
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SECURITIES COMMISSION MALAYSIA ANNUAL REPORT 2023