SC upholds reprimand, fines on Lotte Chemical

In a statement issued yesterday, the SC said the Cabinet Special Committee on Anti-Corruption (JKKMAR) had approved its recommendation to require listed companies to put in place anti-corruption measures and a framework to promote the effective discharge of directors

KUALA LUMPUR: The Securities Commission (SC) is maintaining its decision to reprimand and impose penalties of RM2.19mil on Lotte Chemical Titan Holdings Bhd (LCT) and other relevant parties.

The regulator said on Tuesday the parties reprimanded were LCT, the issuer; Lee Dong Woo and Lee Kwan Ho, who are LCT’s executive directors; Ernst & Young (EY), LCT’s reporting accountant; and Maybank Investment Bank Bhd, the principal adviser to LCT’s listing exercise.

The reprimand and penalties imposed on July 8 this year were for their failure to inform the SC of material developments prior to LCT’s listing in 2017. 

In addition, the SC also reprimanded and fined Maybank IB for its failure to carry out appropriate due diligence on LCT. 

“Given the severity of the failure of parties to inform the SC of the material developments, the SC imposed a fine of RM560,000 on LCT and a fine of RM297,500 on EY.

“The executive directors of LCT were fined RM441,000 each, whereas a fine of RM450,000 was imposed on Maybank IB,” it said.

The SC also maintained its directive for EY and Maybank IB to conduct a comprehensive review and assessment of their policies and processes related to their roles as reporting accountant and principal adviser respectively. 

“Both EY and Maybank IB have submitted their respective reviews and assessments of their policies and processes related to their roles. 

“The application to the SC to review the imposition of reprimand by three LCT independent non-executive directors, Tan Sri Abdul Rahman Mamat, Tan Sri Dr Rafiah Salim and Ang Ah Lek were allowed and the reprimand was set aside.
 
“LCT’s non-independent non-executive director, Cho Seongtaeg’s further reply in relation to his application for review is still pending,” the SC said.