BURSA MALAYSIA SECURITIES PUBLICLY REPRIMANDS AND/OR FINES ECOBUILT HOLDINGS BERHAD AND TWO (2) FORMER DIRECTORS

Bursa Malaysia Securities Berhad [Registration No.: 200301033577 (635998-W)] (Bursa Malaysia Securities) has publicly reprimanded Ecobuilt Holdings Berhad (ECOHLDS) and 2 of its former directors for breach of the Bursa Malaysia Securities Main Market Listing Requirements (MAIN LR). In addition, the 2 former directors were imposed a fine of RM200,000 each.

ECOHLDS was publicly reprimanded for breach of the following provisions of the MAIN LR: -

Delay Breaches

1. Paragraph 9.19(19)(a)(ii) of the MAIN LR for failing to make an immediate announcement of the winding-up order dated 24 July 2024 against ECOHLDS (Winding-Up Order).

2. Paragraph 9.03(1) read together with paragraph 9.04(f) of the MAIN LR for failing to make an immediate announcement of the following: -

(a) the appeal to the Court of Appeal against the Winding-Up Order filed by ECOHLDS on 25 July 2024 (WO Appeal); and

(b) the Summons in Chambers filed at the High Court by ECOHLDS on 26 July 2024 to, amongst others, stay the execution of the Winding-Up Order pending the hearing/disposal of the WO Appeal (WO Stay Application).

Misrepresentation Breach

3. Paragraphs 9.35A(1)(a) & (b) of the MAIN LR for failing to ensure ECOHLDS’ announcement dated 24 July 2024 (24 July Announcement) was factual, accurate, not false and misleading.

2 former directors of ECOHLDS at the material time had breached paragraph 16.13(b) of the MAIN LR for permitting ECOHLDS to commit the breaches for which the following penalties were imposed on them: -

The findings of breach and imposition of the above penalties on ECOHLDS and the directors were made pursuant to paragraph 16.19 of the MAIN LR upon completion of due process and after taking into consideration all facts and circumstances of the matter including the materiality of the breaches, impact of the breaches to ECOHLDS and shareholders/investors and the roles, responsibilities, knowledge, involvement and conduct of the directors.

Bursa Malaysia Securities views the contraventions seriously as timely, full and accurate disclosure of material information that might affect investors’ interests is key to a transparent, orderly and fair market. Further, the requirement to make an immediate announcement of a winding-up order which affects the interest of shareholders and triggered de-listing under paragraph 16.11(2)(d)(ii) of the MAIN LR was crucial to shareholders and investors to aid informed investment decision.

Bursa Malaysia Securities has also reminded ECOHLDS and its Board of Directors of their responsibility to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public.

BACKGROUND

On 24 July 2024, the Kuala Lumpur High Court had dismissed ECOHLDS’ application to stay the winding-up petition filed against ECOHLDS and made the Winding-Up Order against the company. However, ECOHLDS had failed to make an immediate announcement of the Winding-Up Order and further, misrepresented in the 24 July Announcement that the High Court had ordered to stay the winding-up petition. ECOHLDS only announced the Winding-Up Order on 29 July 2024, after a delay of 3 market days and announced further information of the Winding-Up Order as required by Bursa Malaysia Securities on 30 July 2024 and 1 August 2024. 

ECOHLDS had also filed the WO Appeal and the WO Stay Application on 25 July 2024 and 26 July 2024 respectively.  However, ECOHLDS did not make any announcement on the WO Appeal and had only announced the Winding-Up Order together with the WO Stay Application on 29 July 2024.

There was no reasonable explanation for the failure of ECOHLDS to make an immediate announcement of the Winding-Up Order, the WO Appeal and the WO Stay Application and further, to misrepresent in the 24 July Announcement that the High Court had ordered to stay the winding-up petition. It is clear from paragraph 9.03(1) read together with paragraph 9.04(f), paragraph 9.19(19) of the MAIN LR and the Corporate Disclosure Guide issued by Bursa Malaysia Securities that a listed issuer is required to make an immediate announcement to the Exchange upon occurrence of any material development arising from the winding-up proceedings including the winding-up order being made against a listed issuer.

The directors, who knew of the Winding-Up Order, the WO Appeal and the WO Stay Application, could not merely rely on the advice of solicitors or the company secretary without undertaking reasonable enquiries/assessment towards ensuring compliance with the MAIN LR. This was particularly in view of the materiality of the announcement to shareholders and investors to make informed investment decision and the implications or effects of the Winding-Up Order vis-à-vis the significant consequence of delisting arising from the Winding-Up Order.  In this respect,

• the trading of ECOHLDS’ securities was suspended on 9 August 2024 arising from the Winding-Up Order but ECOHLDS was not de-listed pursuant to paragraph 16.11(2)(d)(ii) of the Main LR in view of the WO Appeal and WO Stay Application; and  
• subsequently, the Winding-Up Order had been set aside by the Court of Appeal on 11 September 2024.