Bursa Malaysia reprimands Sarawak Consolidated, fines two directors

KUALA LUMPUR (Dec 1): Bursa Malaysia Securities Bhd has publicly reprimanded Sarawak Consolidated Industries Bhd (SCIB) and two of its directors for breach of the Bursa Malaysia Securities Main Market Listing Requirements.

Bursa Malaysia Securities said SCIB’s non-independent non-executive chairman (retired on Dec 8, 2022) Datuk Mohd Abdul Karim Abdullah as well as group managing director and chief executive officer (resigned on June 28, 2023) were imposed a fine of RM27,000 each.

“SCIB was publicly reprimanded for failing to issue the annual report that included the audited financial statements together with the auditors’ and directors’ report for the 18-month financial period ended June 30, 2021 (AR 2021) on or before Oct 31, 2021.

“SCIB only issued the AR 2021 on Jan 17, 2022, after a delay of about two months,” Bursa Malaysia Securities said in a statement today.

Additionally, Bursa Malaysia Securities said SCIB was also required to review and assess the adequacy and competency of the company’s finance and accounting resources and adequacy, comprehensiveness, implementation and effectiveness of the company’s policies and procedures in respect of financial reporting.

“Bursa Malaysia Securities views the breach seriously as timely submission of financial statements is a fundamental obligation of listed companies and is of paramount importance in ensuring an orderly and fair market for securities traded on Bursa Malaysia and necessary to aid informed investment decisions.

“Bursa Malaysia Securities has also reminded SCIB and its board of directors (BOD) of their responsibility to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public,” it said.

SCIB’s failure to issue the AR 2021 within the stipulated timeframe was mainly due to the failure to address/resolve the audit issues on revenue recognition and recoverability of receivables from overseas construction contracts/projects which had been raised by the company’s external auditors since November 2020.

SCIB had subsequently re-classified the transactions relating to the overseas construction contracts/projects by disclosing the net amount due to the group and to the company of RM64.22 million or  US$15.67 million and RM17.85 million or US$4.25 million respectively as project management fee.

Consequently, adjustments were made to the financial statements which included a reduction of the group’s revenue from RM748.55 million (based entirely on the construction contracts previously) to RM93.27 million, the details of which were disclosed in Note 22 to the audited financial statements (AFS 2021) announced on Dec 31, 2021.

The external auditors had issued a Qualified Opinion on the AFS 2021 where the external auditors were unable to obtain sufficient appropriate audit evidence of the overseas construction contracts/projects and all the related adjustments.

There was also a change of external auditors where the previous external auditors’ resignation on July 23, 2021 was due to the action of the company in requesting for the auditors’ voluntary resignation. – Bernama