In today’s edition of Evening 5 — Bursa Malaysia has publicly reprimanded and fined RHB Investment Bank for failing in its duties as an IPO adviser. Meanwhile, there is still cautious optimism for Malaysia’s property market recovery.
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NewsTranscript
00:00 [Music]
00:04 Bursa Malaysia Securities has publicly recommended and imposed a fine of
00:08 350,000 on RHB Investment Bank for two breaches of the listing requirements,
00:14 including failing to conduct proper due diligence in relation to the proposed
00:18 listing of an ACE market applicant as its sponsor and principal advisor.
00:22 The second breach is over RHB IB's failure to immediately notify Bursa
00:27 of material developments concerning the applicant's business,
00:30 operations, future plans and prospects after the initial submission.
00:34 In the due diligence breach, Bursa said RHB IB had failed to make reasonable inquiries or
00:39 consider all relevant matters to ensure there was no misstatement or material omission in
00:44 the submission and disclosures made in the initial listing application and draft prospectus
00:50 which were submitted to Bursa for the applicant. This resulted in a material omission pertaining
00:55 to the advance/financing arrangement by the applicant with its major suppliers and the
01:00 credit risk/recoverability of the advances to one major supplier that had been wound up prior
01:06 to the initial submission. Bursa concluded that there was inadequate assessment by RHB IB on the
01:12 applicant's internal controls and risk management systems. The regulator added that there were also
01:18 numerous key shortcomings and deficiencies made in the draft prospectus, leading to Bursa's
01:23 rejection of the proposed listing of the applicant. The regulator also highlighted that RHB IB only
01:29 disclosed the material information in both breaches upon being queried by Bursa on the matter.
01:34 Bursa said that RHB IB had failed in the discharge of its duties and said that it was
01:40 "not acceptable" that the bank had merely relied on the applicant and other advisors
01:44 to highlight the material issues and only undertook the necessary inquiries/assessments
01:49 upon being queried by the regulator. Bursa also pointed out that its finding of the breaches and
01:54 the imposition of the public reprimand and fine on RHB IB were made after taking into consideration
02:00 all facts and circumstances of the matter, adding that this was not the first time the
02:04 investment bank had breached the listing requirements. Besides the fine and reprimand,
02:08 RHB IB had been required to table Bursa's decision to its Board of Directors and conduct a
02:14 comprehensive review and assessment on the adequacy and effectiveness of its internal policies,
02:19 processes and procedures relating to its role as an advisor/sponsor.
02:24 Malaysia's total property transaction value hit $85.37 billion, up 1.1% year-on-year,
02:36 with more than 184,000 transactions recorded in the first half of 2023,
02:42 says a report from the National Property Information Centre.
02:45 During the launch of the NAPIC report, Deputy Finance Minister 1 Datuk Sri Ahmad Mazlan said
02:50 the property market was stable in the first half, despite a number of headwinds such as
02:54 inflationary pressures which limited the sector's growth potential. He adds that the government is
02:59 cautiously optimistic about the outlook for the second half, with the sector expected to continue
03:04 its recovery momentum in line with economic growth and bolstered by initiatives and
03:09 accommodative policies. Residential property saw 114,973 transactions worth $44.78 billion in the
03:19 first half, contracting slightly by 1% in volume and 1.8% in value from a year ago. Homes in
03:25 Kuala Lumpur, Penang, Johor and Selangor accounted for about half the total volume. Meanwhile,
03:31 17,602 transactions were recorded by the commercial property segment, totaling $16.76 billion,
03:38 up 16% in volume and 19.5% in value. The number of new residential property launches fell
03:45 significantly by 50.2% to over 16,000 units during the period from 33,205 units a year ago.
03:53 Residential property overhang recorded an improvement, with a total of 28,286 overhang
03:59 units worth $18.3 billion recorded in the first half, down by 5.3% in volume and 0.6% in value
04:07 against the same period last year. However, the outlook for the office sector remains challenging
04:12 due to high vacancy rates, with the still significant amount of unoccupied office space
04:16 in the country indicating an imbalance between supply and demand in the market, according to
04:21 the minister. He adds that despite an improvement in occupancy rates, there was 5.06 million square
04:27 metres of vacant office space, more than half of which was situated in Kuala Lumpur.
04:37 Teraga Nationals, Indirect's 70%-owned subsidiary Southern Power Generation,
04:42 has been allowed to proceed with its challenge of additional tax assessments from the Inland
04:47 Revenue Board, amounting to $78.49 million via a judicial review. In a boss filing on Thursday,
04:54 TNB said the High Court had granted SPG leave or permission to commence a judicial review against
05:00 the notices of assessment issued by IRB, dated May 26, for additional taxes for the year assessment
05:07 of 2017 and 2021. The court also granted the unit an interim stay of all further proceedings,
05:13 including enforcement of the notices, until a hearing fixed for January 11, 2024. The remaining
05:19 30% of SPG is owned by SIPP Energy, a company linked to the Johor royalty. SPG operates two
05:27 720-megawatt combined cycle gas turbine power plants in Pasir Gudang, Johor.
05:33 Property developer Sensuria has partnered with Australian-integrated cancer care provider Icon
05:43 Group to set up and operate oncology centres in the country. In a boss filing, the group said
05:48 its wholly-owned subsidiary, Sensuria Healthcare, inked a shareholders' agreement with Icon Asia
05:53 Holdings to form a joint venture company called Icon Sensuria. According to Sensuria, the JV is
05:59 focused on the set-up and operation of oncology daycare centres and radiation oncology services,
06:05 as well as the management of such centres for third parties, with a focus on Malaysia.
06:10 Icon holds 70% in the JV, Sensuria holds the rest. Sensuria says the JV is expected to
06:16 enhance future profits of the group. Sensuria is principally involved in property development,
06:21 construction and healthcare businesses. According to the group, Icon is Australia's largest
06:26 dedicated cancer care provider and has expanded to Singapore, China, Hong Kong and New Zealand.
06:32 Further discussions between Malaysia and Singapore to create a Johor-Singapore
06:41 Special Economic Zone will be followed by an agreement on terms of reference next month,
06:46 says MB Datuk On Hafiz Ghazi. Last July, the two countries agreed to create a special task force
06:51 to study the establishment of the SEZ, which is expected to report its progress to the leaders
06:57 at the Malaysia-Singapore Leaders' Retreat, scheduled for October. On Hafiz said the
07:02 Johor-Singapore SEZ could make Johor like the city of Shenzhen, which flourished after four
07:08 decades of being a SEZ, according to a Brenama report. He notes that in just four decades,
07:13 Shenzhen has changed from a small city with a population of around 300,000 people
07:18 to a high-tech international metropolis with a population of over 17 million people. However,
07:23 On Hafiz says that the matter definitely requires help and cooperation from all parties,
07:28 from the Singapore government as well as the Malaysian federal government.