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Bursa Malaysia reprimands SCIB & former directors

Publish date: Fri, 01 Dec 2023, 09:24 PM

KUALA LUMPUR: Bursa Malaysia has reprimanded Sarawak Consolidated Industries Bhd (SCIB) and its former directors, Datuk Mohd Abdul Karim Abdullah and Rosland Othman, for not submitting its 2021 annual report within the approved timeline.

The two directors were also imposed a fine of RM27,000 each, the regulator said in a statement today. 

According to Bursa, SCIB had failed to issue the annual report, including the audited financial statements and its auditors' and directors' report for the 18 months ended June 30, 2021 (AR 2021), on or before Oct 31, 2021.

The regulator said SCIB only issued the AR 2021 on Jan 17, 2022, after a delay of about two months.

It added that SCIB's delay in issuing the 2021 annual report was mainly due to the company's failure to address audit issues on revenue recognition and recoverability of receivables from overseas construction projects, issues raised by its external auditor KPMG 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 US$15.7 million (RM64.22 million) and US$4.25 million (RM17.85 million), respectively as project management fee.  

"Consequently, adjustments were made to the financial statements which included a reduction of the group's revenue from RM748.6 million (based entirely on the construction contracts previously) to RM93.3 million the details of which were disclosed in Note 22 to the audited financial statements (AFS 2021) announced on Dec 31, 2021. 

"The external auditor had issued a Qualified Opinion on the AFS 2021 where the external auditor was unable to obtain sufficient appropriate audit evidence of the overseas construction contracts/projects and all the related adjustments," Bursa said.

Bursa noted that finding of breach and imposition of the above penalties on SCIB and its directors were made pursuant to paragraph 16.19 of the Main LR upon completion of due process and after taking into consideration all facts and circumstances of the matter including the materiality of the breach, impact of the breach to SCIB and shareholders/investors and the roles, responsibilities, knowledge, involvement and conduct of the directors.

"Bursa Malaysia 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 has also reminded SCIB and its board of directors of their responsibility to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public," it noted.

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