Bursa publicly reprimands JAKS and principal adviser

KUALA LUMPUR (Bernama) -- Bursa Malaysia Securities Bhd has publicly reprimanded JAKS Resources Bhd (JAKS) and its principal adviser, Kenanga Investment Bank Bhd (KIBB), for contravening the exchange’s Main Market Listing Requirements (Main LR).

The stock exchange said JAKS and KIBB were both publicly reprimanded for breach of paragraph 6.56(1)(b) of the Main LR and paragraph 6.02(5) of the Main LR read together with paragraph 6.56(1)(b) of the Main LR and paragraph 2.1(e) of Practice Note 28, respectively.

"(The reprimand was over) failing to ensure that there were at least 10 market days notice from the date JAKS announced the books closing date to the books closing date for the adjustment to the exercise price and/or additional number of JAKS’ Warrants 2018/2023 (JAKS-WB) arising from the proposed rights issue with warrants announced on May 22, 2020,” it said in a statement today.

Bursa Malaysia Securities said the finding of breach and imposition of the public reprimand on JAKS and KIBB were made pursuant to paragraph 16.19 of the Main LR upon completion of due process after taking into consideration all facts and circumstances of the matter including the materiality and impact of the breach.

"Bursa Malaysia Securities views the contravention seriously as paragraph 6.56(1)(b) of the Main LR serves to provide sufficient time for securities holders or investors to make a decision of the entitlements to the interests, new securities or other distributions or rights arising from adjustments made due to an issue of securities,” it said.

On May 22, 2020, JAKS announced that the company proposed to undertake a renounceable rights issue of new ordinary shares together with free detachable warrants and that the proposed rights issue with warrants may give rise to adjustments to the exercise price and/or additional number of JAKS-WB (Adjustments).

On Oct 13, 2020, JAKS announced that the entitlement/books closing date (BCD) for the proposed rights issue with warrants was fixed on Oct 27, 2020, but did not announce the BCD for the adjustments.

On Oct 26, 2020, JAKS announced that the BCD for the adjustments was fixed on Oct 27, 2020 and stated that the delay in the announcement was due to oversight.

The exchange said that as the announcement of the BCD for the adjustments was only made on Oct 26 after trading hours, there was a notice of less than one day to the BCD and the holders of JAKS-WB were essentially deprived of the opportunity to make a decision in respect of the adjustments.

Furthermore, it said that the price of JAKS-WB was not adjusted on Oct 26, which was the ex-date that had impacted the fair and orderly trading of JAKS-WB.

"Both JAKS and its appointed principal adviser, KIBB have a duty to ensure compliance with paragraph 6.56(1)(b) of the Main LR which imposes a clear requirement that the period from the date the listed issuer announces the BCD for the issue of convertible securities arising from adjustments due to an issue of securities to the BCD must not be less than 10 market days,” it added.