RHB Investment Bank publicly reprimanded, fined for breaching listing rules

 

Bursa Malaysia Securities said that RHB Investment Bank had previously committed breaches of the listing requirements.

PETALING JAYA: Bursa Malaysia Securities Bhd (Bursa Securities) has publicly reprimanded and fined RHB Investment Bank Bhd (RHB IB) for breaching listing requirements in relation to a proposed initial public offering (IPO) of an ACE Market applicant.

In a statement today, the regulator said RM350,000 in fines had been imposed on RHB IB as the sponsor and principal adviser for an unnamed applicant seeking admission to the ACE Market.

The exchange regulator said the imposition of the public reprimand and fine on RHB IB were made upon completion of due process after taking into consideration all facts and circumstances of the matter.

This included the materiality of the breaches, the roles and responsibilities of RHB IB as a sponsor and principal adviser and the fact that “RHB IB had previously committed breaches of the listing requirements”.

Bursa Securities said the investment and banking service provider was being reprimanded for two breaches involving ACE Market listing requirements (ACE LR).

The first breach occurred when RHB IB failed to conduct proper due diligence and make all reasonable due diligence enquiries as well as consider all relevant matters to ensure there was no misstatement or material omission.

It also failed to ensure all material information were properly and accurately disclosed in the submission and disclosures made in the initial listing application and draft prospectus submitted to Bursa Securities in relation to the proposed listing.

“There were also numerous key shortcomings and deficiencies in the submission and disclosures made in the draft prospectus leading to Bursa Securities’ rejection on the proposed listing of the applicant,” it said.

The second breach happened when RHB IB failed to immediately notify Bursa Securities of the material developments concerning the applicant’s business, operations, future plans and prospects after the initial submission.

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Failure to discharge its duties

It was only upon receipt of the regulator’s queries that RHB IB notified Bursa Securities of these material agreements and developments, it said.

“RHB IB had failed in the discharge of its duties as the sponsor and principal adviser which was unacceptable, particularly in view of the numerous engagements and queries by Bursa Securities.

“Bursa Securities views (RHB IB’s) breaches seriously in view of the primary and crucial role played by the sponsors and advisers in the assessment of the suitability of an applicant for admission to the ACE Market which is a ‘sponsor-driven’ market,” it said.

As an adviser, the investment bank needs to ensure quality, accurate and adequate disclosures in the initial public offering and prospectus for the proposed listing of an applicant, it added.

“Bursa Securities wishes to remind the sponsors and advisers to maintain the highest standards of integrity, accountability and responsibilities in discharging their role effectively and competently towards ensuring compliance of the ACE LR,” it added.

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The regulator said RHB IB’s board needed to conduct a comprehensive review and assessment of the adequacy and effectiveness of its internal policies, processes and procedures relating to its role as an adviser for submissions to Bursa Securities. - FMT