KUALA LUMPUR (July 29): The High Court has rejected South Malaysia Industries Bhd's (KL:SMI) leave application to commence a judicial review against the Securities Commission Malaysia (SC).

The judicial review application was to compel the capital market regulator to hold a hearing, and come up with an official decision on SMI's complaint it made in March 2023.

The complaint was regarding an alleged breach of the Capital Markets and Services Act 2007 by SMI’s substantial shareholders Honsin Apparel Sdn Bhd and HIQ Media Sdn Bhd and other parties acting in concert (PACs) with them.

In a filing with Bursa Malaysia, SMI said the High Court delivered the decision on Monday following the hearing for the leave application, which was held on June 20. SMI said it will appeal against the decision.

"The company is in the midst of filing a motion to the Court of Appeal to appeal against the High Court decision as the company’s legitimate right for an application to the SC reviewing their own decision under Section 364 of the Capital Markets and Services Act 2007 (CMSA) was denied," the company said.

Section 364 stipulates that the commission may review its own decision under the CMSA upon an application made by any person who is aggrieved by such decision.

SMI's shareholder Honsin is wholly owned by Techbase Industries Bhd (KL:TECHBASE), formerly known as Prolexus Bhd. Techbase also owns 51.91% of HIQ Media.

In its 2023 complaint, SMI alleged that Honsin and the PACs had taken control of over 33% of the company's shareholdings without making a mandatory takeover offer.

It was reported that Honsin had made several attempts to wrest control of SMI’s board, but to no avail so far.

In response to the judicial review application filed in March 2024, the SC in a brief statement said it had already looked into and acted on the complaint after receiving it about a year ago from the group.

The regulator said it also had multiple engagements and communications with SMI on the issue, with the most recent being in January this year.

Shares in SMI closed two sen or 4.44% lower at 43 sen on Monday, giving the company a market capitalisation of RM90.27 million.