Bursa Malaysia Securities Berhad has publicly reprimanded TA Securities Holdings Berhad (TA Securities), as the Sponsor and Principal Adviser for Catcha Digital Berhad (CATCHA) [formerly known as Rev Asia Berhad (REV)] for breaches of the Bursa Malaysia Securities Ace Market Listing Requirements (ACE LR).
TA Securities was publicly reprimanded for breaches of the following provisions of the ACE Listing Requirements (LR):-
(1) Rule 4.07(2)(f) read together with Rule 3.01(2) of the ACE LR and paragraph 8.0 of Guidance Note 18 (GN18) for failing to undertake an assessment on the internal controls of REV and risk management systems of iMedia Asia Sdn Bhd (iMEDIA) and its subsidiaries (collectively, iMEDIA Group) prior to or at the material time of submission to Bursa Malaysia Securities of the listing application on REV’s proposed regularisation plan (Listing Application) together with the compliance checklist pursuant to GN18 (GN18 Compliance Checklist) on 22 January 2021.
(2) Rules 2.18(1)(a) & (c) of the ACE LR for failing to ensure that the GN18 Compliance Checklist and the amended GN18 Compliance Checklist (Amended GN18 Compliance Checklist) submitted on 22 January 2021 and 9 June 2021 respectively were accurate and not false and misleading in respect of the following:-
• TA Securities’ statement on the adequacy of the risk management systems of iMEDIA in the GN18 Compliance Checklist;
• TA Securities’ statement on the adequacy of the internal controls of REV in the Amended GN18 Compliance Checklist; and
• TA Securities’ confirmation on compliance with paragraph 8.0 of GN18 in both the GN18 Compliance Checklist and Amended GN18 Compliance Checklist, when in actual fact, there was no review or assessment undertaken on the risk management systems of iMEDIA and key internal controls of REV.
The finding of breach and imposition of the public reprimand on TA Securities were made pursuant to Rule 16.19 of the ACE LR upon completion of due process after taking into consideration all facts and circumstances of the matter including the materiality of the breaches, the role and responsibilities of TA Securities and the fact that TA Securities had previously committed breaches of the listing requirements.
Bursa Malaysia Securities views the breaches seriously as the requirements of Rule 4.07(2)(f) of the ACE LR and paragraph 8.0 of GN18 served to ensure that an applicant seeking admission to the Official List has proper risk management and internal controls in place for compliance with the applicable laws and regulations and particularly as the state of risk management and internal controls of a listed corporation forms part of the continuing listing obligations and corporate governance requirements under the ACE LR.
Bursa Malaysia Securities wishes to remind the Sponsors and advisers of listed corporations to maintain the highest standards of integrity, accountability and responsibilities including the duty to supervise their employees in discharging their role effectively and competently towards ensuring compliance of the ACE LR.
REV was a Cash Company pursuant to Rule 8.03(1) of the ACE LR and Guidance Note 2 since 3 August 2017 and had appointed TA Securities as the Sponsor and Principal Adviser of the company on 18 July 2019.
On 22 January 2021, TA Securities had submitted the Listing Application to Bursa Malaysia Securities for approval, together with the GN18 Compliance Checklist. REV’s proposed regularisation plan involved, amongst others, a proposed acquisition of the entire equity interest in iMEDIA which would result in a significant change in the company’s business direction or policy and TA Securities as the Sponsor must ascertain the adequacy of both the internal controls and risk management systems of REV and iMEDIA Group in assessing that the enlarged CATCHA Group was suitable for listing pursuant to Rule 4.07(2)(f) of the ACE LR and paragraph 8.0 of GN18.
Based on a report on the review of corporate governance, risk management and internal controls of REV and iMEDIA Group dated 22 January 2021 submitted together with the Listing Application and GN18 Compliance Checklist, there was in fact no review undertaken on the key internal controls of REV and risk management systems of iMEDIA Group.
However, TA Securities had in the GN18 Compliance Checklist confirmed compliance with paragraph 8.0 of GN18 and stated that iMEDIA had the relevant risk management systems in place which were adequate to comply with the applicable laws and regulations.
Further, upon Bursa Malaysia Securities’ queries dated 24 February 2021 and 17 May 2021, TA Securities had on 9 June 2021 submitted the Amended GN18 Compliance Checklist which deleted the representation that iMEDIA had adequate risk management systems but again confirmed compliance with paragraph 8.0 of GN18. TA Securities had also represented that REV had adequate internal controls and risk management systems in the Amended GN18 Compliance Checklist notwithstanding that no internal control assessment was conducted on REV.
TA Securities had failed to undertake an assessment on the internal controls of REV and risk management systems of iMEDIA Group to ascertain the suitability of the enlarged CATCHA Group for listing and repeatedly provided inaccurate and misleading statements and
confirmations to Bursa Malaysia Securities in respect of the same.
Such conduct by TA Securities as a Sponsor and Principal Adviser was unacceptable, particularly in view of the numerous engagements and queries by Bursa Malaysia Securities.