PETALING JAYA: The Securities Commission (SC) has reprimanded Mulpha International Bhd's board of directors for failure to ensure that information in a 2010 prospectus was disclosed in “a full and true manner”.
This administrative action was taken on Jan 3 and the details posted on the SC website yesterday. The SC said this related to a breach of Paragraph 1.03 of the regulator's guidelines for abridged prospectuses.
The paragraph states: “Any of the persons set out in section 236 of the CMSA (Capital Markets and Services Act 2007), e.g. directors, promoters, and advisers have the primary obligation and liability for the contents of abridged prospectuses. They must ensure that all information necessary for assessing the securities offered by the abridged prospectus is disclosed in a full and true manner.
The SC described the misconduct as a failure to ensure the final basis of allocation of excess rights shares was consistent with the basis disclosed in Mulpha's abridged prospectus on Feb 24, 2010.
(Excess rights shares are shares issued in a rights issue that are not taken up by some shareholders. Usually, other shareholders are given the opportunity to apply for these excess rights shares.)
In August 2009, the property developer proposed to undertake a renounceable two-call rights issue. This was approved by shareholders in an EGM in December that year.
According to the abridged prospectus, Mulpha's board of directors reserved the right to allot the rights shares applied for under the excess rights shares application in such a manner as they deem fit and expedient and in the best interest of the company.
“The board also reserves the right to accept any excess rights shares application in full or in part, without assigning any reason thereof,” it said, adding that the allocation of the excess rights shares would be made in a fair and equitable manner.
The prospectus said the main priority in alloting the excess rights shares was to minimise the incidence of odd lots.
It also said the intention of the board to allot the excess rights shares was for allocation to the entitled shareholders and/or their renouncees who had applied for excess rights shares on a pro-rata basis and in board lot, after taking into consideration the respective shareholdings of the entitled shareholders as at the entitlement date and/or the number of rights shares applied for by the renouncees.
Mulpha is active in Australia and Johor. It has two listed companies in its stable subsidary Mulpha Land Bhd and associate Mudajaya Group Bhd.
When contacted, Mulpha independent director Datuk Yusli Mohamed Yusoff, the former CEO of Bursa Malaysia Bhd, declined to comment on the SC's action, saying the matter related to events that had taken place before he joined the board in July last year.
The SC did not name the directors involved. Mulpha's directors as listed in the abridged prospectus were executive chairman Lee Seng Huang, CEO Chung Tze Hien, executive director Law Chin Wat, non-independent non-executive director Datuk Robert Chan Woot Khoon, and independent directors Kong Wah Sang, Chew Hoy Ping and Datuk Lim Say Chong. All of them are still on the board.