South Malaysia Industries Berhad (SMI) and its directors have filed an application for leave to commence judicial review proceedings against the Securities Commission Malaysia (SC), seeking to overturn sanctions that include a RM455,000 penalty imposed jointly and severally on the company’s board.
The dispute relates to sanctions imposed by the SC on March 18, 2026 over the board’s alleged breaches of the Rules on Take-overs, Mergers and Compulsory Acquisitions in connection with a takeover offer by Target 1 Sdn Bhd.
According to SMI, the SC found that its board had failed to respond within four market days to the offeror’s request for details relating to the company’s record of depositors.
The regulator also found that the board had failed to appoint an independent adviser as soon as practicable to provide comments, opinions, information and recommendations on the takeover offer through an independent advice circular.
The board was also cited for failing to submit the independent advice circular, together with the company’s board circular, to the SC for comments within the stipulated timeframe.
Following these findings, the SC imposed a reprimand on the board, a RM455,000 penalty jointly and severally against the directors, and a directive requiring the board to provide the requested record of depositors to the offeror.
SMI subsequently submitted an application to the SC on March 25 seeking a review of the regulator’s decision under Section 364 of the Capital Markets and Services Act 2007 (CMSA).
However, the company said its directors received letters from the SC dated Aug 24 informing them that the review application had been dismissed and that the original sanctions would be maintained.
Following the dismissal, the SC directed the board to provide the offeror with details of the company’s record of depositors within four market days, or no later than Sept 1, 2026. The board was also required to confirm its compliance with the directive to the regulator.
SMI and its directors have now turned to the High Court, seeking leave to challenge the SC’s decisions through judicial review.
