English

13.07.2018

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

MULTI SPORTS HOLDINGS LTD (“MSPORTS”)

The Company had on 3 July 2018 announced that the Securities Commission Malaysia (“SC”) had vide their letter dated 27 June 2018 (“SC letter”) reprimanded MSPORTS as a result of its finding that MSPORTS has breached Section 354(1)(a) of the Capital Markets and Services Act 2007 (“CMSA”) read together with Section 369(b)(B) of the CMSA for knowingly causing the furnishing of MSPORTS's Financial Statements that is false or misleading to Bursa Malaysia Securities Berhad ("Bursa Securities"), as follows:-

• MSPORTS had failed to disclose the outstanding liabilities under the 8 Loans owed by Baixing in MSPORTS's Financial Statements. In the said Financial Statements, it was disclosed under "Interest-bearing bank borrowings" that MSPORTS's liabilities were RMB11.5 million only instead of the liabilities highlighted in the SC's Notice to Show Cause dated 13 February 2018.
• The non-disclosure of the outstanding liabilities as stated above had caused MSPORTS's Financial Statements, which were lodged with Bursa Securities, to contain false or misleading information relating to the affairs of MSPORTS.

06.07.2018

MSWG Weekly Newsletter

Two Observations Relating to Directors at the AGM

Yes, again, we have passed the peak of the AGM season (May-June).

I would like to share two observations on directors and Chairman at the AGM sessions.

Directors who lack the mingling sensation

29.06.2018

MSWG’S QUICK TAKE ON ON-GOING CORPORATE DEVELOPMENTS

PERAK CORPORATION BERHAD (“PCB”)

PCB held its 27^th Annual General Meeting (“AGM”) on 27 June 2018.

The AGM of PCB was attended by the representatives of MSWG.  As PCB’s current liabilities exceeded its current assets by RM158.5 million, the Auditors had raised doubt on PCB’s ability to continue as a going concern.

MESSAGE FROM THE CEO

Now that we are reaching the tail-end of the peak period of the AGM season, it is timely to share some of our observations in relation to corporate governance matters that we have noticed while perusing Annual Reports and CG Reports.

1.   PLCs are required to disclose Alternative Practices when they depart from a Practice in the Malaysian Code on Corporate Governance (MCCG). This is a rule requirement under Paragraph 3.2A(b) of Practice Note 9 of the Main Market Listing Requirements (MMLR).

PLCs must follow the rule, as otherwise, they will be subject to sanctions.

Some PLCs fail to disclose the Alternative Practice.

What must be appreciated is that the disclosure must not be just of ‘an’ Alternative Practice, but that of an Alternative Practice that achieves the Intended Outcome stipulated in the MCCG.

While some PLCs disclose Alternative Practices, what we realise is that that Practice does not achieve the Intended Outcome.

A typical example of this is Practice 7.2 which requires the PLCs to disclose the remuneration component of top five senior management on a named basis including salary, bonus, benefits-in-kind and other emoluments in bands of RM50,000. Many of the Alternative Practices narrated do not achieve the Intended Outcome.

Large Companies (as defined under the MCCG), must, in addition, disclose the timeframe required to adopt a Practice (that it has not already adopted) and must also disclose the measures taken or intended to be taken to achieve the adoption of the Practice. This disclosure requirement is a rule under the MMLR under Paragraph 3.2C (a) (b) of Practice Note 9. This too is not disclosed sometimes.