(Petaling Jaya, Saturday): On Wednesday, the Kuala Lumpur Stock Exchange (KLSE) in a statement said United Engineers (M) Bhd. (UEM) had been publicly reprimanded and fined RM100,000 over the announcements relating to the date of its acquisition of 722.9 million Renong shares.
The KLSE said the reprimand and fine were made pursuant to Section 392 of its listing requirements and went on to give the sequence of announcements by UEM pertaining to its acquisition of Renong shares:
The KLSE statement said: "This action by UEM is in contravention of Section 341 of the listing requirements, which requires the contents of a public announcement to be factual, clear and succint.
"As directors of a public listed company, the board of UEM must comply with the exchange’s listing requirements at all times. The exchange views this contravention seriously."
It is clear that this RM100,000 fine and reprimand by the KLSE is separate and different from the fine and reprimand announced by the Finance Minister, Datuk Seri Anwar Ibrahim, in his Ministerial statement in Parliament on 24th November 1997 on the UEM-Renong deal.
Anwar had told Parliament that UEM would be fined and reprimanded for not makaing timely public disclosures about the circumstances leading up to its purchase of shares in its parent company, Renong. Up to now, however, the public had not been told as to the amount of fine imposed on UEM for failing to make timely public disclosures of its purchase of Renong shares.
However, apart from failing to provide "factual, clear and succint" information about the date of its acquisition of the 722.9 million Renong shares, UEM had also failed to provide factual and truthful information about the nature of its purchase, namely that it had acquired the 722.9 million Renong shares in the open market.
It is clear that UEM had not bought the 722.9 million Renong shares in the open market, but in eight tranches.
The first tranche, for 340.2 million shares, was registered under BOC Nominees (Tempatan) Sdn. Bhd., the second for 285.715 million shares was registered under HLB Nominees (Tempatan) Sdn. Bhd while the third under Rashid & Lee Nominees (Tempatan) Sdn. Bhd. was for 67.407 million shares. Other blocks were 18.06 million shares (Lintasan Savana Sdn. Bhd), 9 million shares (RHB Nominees), 1.5 million shares (Multi-Purpose Bank Nominees), 1 million shares (BHLB Nominees) and 5 million shares registered under Pengkalan Nominees (Tempatan) Sdn. Bhd.
The Securities Commission and the KLSE should explain why they had not taken any action against UEM for making the untrue and misleading statement that it had bought the 722.9 million Renong shares in the open market.
The condition that UEM must buy the Renong shares only from the open market was one of the three conditions imposed by the Foreign Investment Committee before giving UEM the waiver from having to make a mandatory general offer to the minority Renong shareholders.
Anwar had announced in Parliament in November that the waiver had been withdrawn as UEM had breached one of the three conditions, namely that UEM’s purchase of shares was limited to a 50 per cent stake in Renong.
The subsequent reinstatement of the waiver by the FIC after UEM had broken two of the three original conditions is one reason why there is market dismay at the lack of accountability and transparency in corporate governance in Malaysia.
The regulatory authorities would be required to explain in next month’s Parliament the reasons why they have not taken any action against UEM for making the untrue and misleading statement that it had bought the 722.9 million Renong shares in the open market and why the waiver was reinstated despite the infringement of two of three conditions originally stipulated by the FIC.