BURSA MALAYSIA SECURITIES PUBLICLY REPRIMANDS IRE-TEX CORPORATION BERHAD FOR BREACH OF MAIN MARKET LISTING REQUIREMENTS

IRE-TEX CORPORATION BERHAD

Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded Ire-Tex Corporation Berhad (IRETEX) in respect of the company’s fourth quarterly report for the financial year ended 31 December 2014 (QR 4/2014) announced on 27 February 2015 which was in contravention of paragraph 9.16(1)(a) of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR).  

Paragraph 9.16(1)(a) of the Main LR states that a listed issuer must ensure that each announcement made is factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions. 

IRETEX had failed to ensure that its QR 4/2014 took into account the adjustments as stated in the announcement dated 8 May 2015. 

The public reprimand was imposed pursuant to paragraph 16.19(1) of the Main LR after taking into consideration all facts and circumstances of the matter including the impact on IRETEX’s share price movement and volume traded after announcement of the QR 4/2014 and the company’s audited financial statements / adjustments and upon completion of due process. 

IRETEX is also required to review and ensure the adequacy and effectiveness of its financial reporting function and carry out a limited review on its quarterly report submissions. The limited review must be performed by the company’s external auditors for four quarterly reports commencing no later from the quarterly report for the financial period ended 30 June 2016.  In addition, IRETEX must ensure all its directors and relevant personnel attend a training programme in relation to compliance with the Main LR pertaining to financial statements. 

While Bursa Malaysia Securities has not found any of IRETEX’s directors to have caused or permitted the breach by the company, Bursa Malaysia Securities wishes to highlight and remind that it is the duty of the directors to maintain appropriate standards of responsibility and accountability in ensuring compliance of the Main LR.  The Board of Directors of IRETEX at the material time of the announcement of the QR 4/2014 was as follows:-

1.    Dato’ Dr. Yap Tatt Keat
2.    Dr. Lai Chee Chuen
3.    Encik Abdul Rahim Bin Abdul Hamid
4.    Mr. Na Chiang Seng
5.    Mr. Collin Goonting A/L O.S. Goonting
6.    Mr. Soo Tee Wei

Bursa Malaysia Securities views the contravention seriously as timely and accurate submission of financial statements to enable investors to make informed investment decisions is one of the fundamental obligations of companies listed on the Official List of Bursa Malaysia Securities.  


BACKGROUND

IRETEX had reported an unaudited profit after taxation and minority interest of RM2,792,000 in its QR 4/2014 announced on 27 February 2015 as compared to an audited loss after taxation and minority interest of RM6,155,000 in the audited financial statements for the financial year ended 31 December 2014 (AFS 2014) announced on 5 May 2015.  The difference of RM8,947,000 between the profit/loss after taxation and minority interest for the QR 4/2014 and AFS 2014 represented a variance of 320.4%.

The main adjustments were in respect of the following: 
•    reversal of provision of profit guarantee to goodwill in other income of RM2,481,000 which was wrongly recognised as other income under QR 4/2014 by IRETEX instead as contingent consideration  in accordance with paragraph 39 of MFRS 3; and
•    impairment of trade receivables of RM5,799,000 from two (2) of IRETEX’s related parties which were not impaired in QR 4/2014 despite being raised/advised by the external auditor prior to the issuance of the QR 4/2014, clear provisions under MFRS 136 and 139 and IRETEX’s accounting policies on impairment of receivables.  In addition, it was noted that:-  
-    the trade receivables had been outstanding for more than 5 months as at 27 February 2015; and
-    there was no evidence of the related parties’ ability to pay the same.

IRETEX and its directors have the obligation to ensure that the financial statements are prepared in accordance with the applicable approved accounting standards. 


Announcement Info

Company Name IRE-TEX CORPORATION BERHAD
Stock Name IRETEX
Date Announced 06 May 2016
Category Listing Circular
Reference Number ILC-06052016-00008