BURSA Malaysia Securities Bhd has reprimanded and fined six directors of Brem Holding Bhd for breaching the exchange’s Main Market listing requirements, the exchange said in a statement today.

Managing director Khoo Chai Kaa was fined RM200,000; executive director Khoo Chai Thiam, who retired on Sept 20, 2018, RM50,000; and executive director Low Yew Hwa, RM50,000.

Low was appointed non-independent non-executive director on August 24, 1992 and redesignated as executive director on July 23, 2019. 

The other three are independent non-executive director and audit committee chairman Wong Miow Song, who was fined RM50,000; non-independent non-executive director Khoo Hui Keam (RM50,000); and non-independent non-executive director audit committee member Khoo Hui Giok (RM50,000). 

The six had failed to ensure that payments and advances on behalf of GJH Prestige Sdn Bhd (GJHP) from August 28, 2014 to August 22, 2019 totalling RM26.46 million were fair and reasonable to Brem and its shareholders, breaching paragraph 8.23(2)(a)(i), which is read together paragraphs 8.23(1)(a)(ii) and (iii) of the listing requirements.

“The penalties on the directors were made pursuant to paragraph 16.19 (1)(b) of the Main Market listing requirements on completion of due process and after taking into consideration all facts and circumstances of the matter and the impact of the breach to Brem and its shareholders or investors,” the statement said.

Bursa Malaysia viewed the contravention seriously as the requirements under paragraph 8.23 of the Main Market listing requirements were one of the key investor protection requirements to ensure proper preservation and employment of a company’s assets or funds.

On November 1, 2014, Brem acquired 49% of GJHP from GJH Holdings Sdn Bhd (GJHH).

However, it made advances to or on behalf of GJHP from August 28, 2014 to August 22, 2019, prior and subsequent to the acquisition of GJHP as an associate.

The statement said the board had failed to take proper reasonable care and make due diligence to make an informed assessment on the advances. There was also no documentation to formalise the transaction between Brem and GJHP/GJHH, nor the purposes of the advances.

The result was that by August 31, 2017, GJHP had only repaid RM1.6 million to Brem with remaining advances amounting to RM24.86 million still outstanding.

This outstanding amount represented 4.67% of the group’s net tangible assets (NTA) as at March 31, 2019 and 4.3% of the group’s NTA as at March 31, 2021, nearly eight years after Brem had first provided the advances.

Bursa Malaysia said although Brem had been delisted, the breaches by the directors were committed while Brem was listed on the exchange. – Bernama, September 30, 2022.