Photo by Zahid Izzani/The Edge

KUALA LUMPUR (July 31): Bursa Malaysia Securities Bhd has publicly reprimanded Zen Tech International Bhd (KL:ZENTECH) (formerly Inix Technologies Holdings Bhd) and eight of its directors for misrepresenting its appointment as a Covid-19 vaccine distributor, and for breaches related to its annual report 2021 and corporate governance.

In addition to the public reprimand, the bourse operator imposed a total of RM757,500 in fines on the eight directors.

Group independent non-executive chairman Tan Sri Syed Mohd Yusof and former senior independent non-executive vice chairman Datuk Megat Fairouz Junaidi Megat Junid each received fines of RM105,000.

Other directors penalised include former non-independent non-executive vice chairman Datuk Seri Tan Choon Hwa (RM31,250), executive director Datuk Zhang Li (RM130,000), executive director Siva Kumar a/l Kalugasalan (RM155,000), independent non-executive director and audit committee chairman Edwin Silvester Das (RM131,250), non-independent executive director Zhang Yang, and former independent non-executive director Chak Ho Sum (RM25,000).

Zen Tech breached Paragraph 9.35A(1)(a) & (b) of the ACE Market Listing Requirements (ACE LRs) by failing to ensure that announcements made on Jan 13, 20 and 22, 2021, and April 15 and 20, 2022, were factual, clear, accurate, and not misleading.

The company had claimed to have applied for registration of Covid-19 vaccines from Sinovac, CanSino, and Sinopharm and to be their distributor, but in reality, it only submitted a product classification application for Sinovac and Sinopharm on Jan 11, 2021, and did not apply for the CanSino vaccine or provide evidence of any distribution agreements.

A higher fine was imposed on the two executive directors, Zhang Li and Siva Kumar, as Zhang led the vaccine project and Siva approved the related announcements.

The regulator added that the non-executive directors failed in their supervisory duties, delegating approval to the executive directors without verifying the status of vaccine supply and distribution.

Annual report 2021 breaches

Zen Tech also breached Paragraphs 9.23(1) and 2.18(1)(c) by delaying the issuance of the annual report 2021, and releasing it with unaudited financial statements and an unsigned auditor's report.

The report was issued on Nov 8, 2021 to avoid a trading suspension, despite knowing it was not cleared by the auditors and was only retracted three days later, the regulator noted, adding that the final annual report 2021 was only issued on Nov 16, 2021, after an 11-market-day delay.

Bursa noted a "blatant disregard" of the ACE LRs and a failure by the board to ensure the report was finalised and signed off by auditors. An additional fine was imposed on Siva Kumar for his role in the financial management and audit engagement, as he should have advised against issuing the report on Nov 8, 2021.

The company also violated Paragraphs 15.09 and 15.10 by lacking a qualified audit committee member for about 26.5 months and failing to have at least three members and a chairman for approximately 4.5 months.

In addition to the public reprimand for the annual report 2021 delay breach, Zen Tech is required to review and improve its financial reporting function.

Zen Tech shares closed at one sen on Wednesday, giving it a market capitalisation of RM23.33 million.