Covid-19: SC and Bursa Malaysia Announce Additional Temporary Relief Measures
23 February 2021
In response to the imposition of MCO 2.0 by the Malaysian Government on 11 January 2021, the Securities Commission Malaysia (‘
SC’) and Bursa Malaysia Berhad (‘
Bursa Malaysia’) announced additional temporary relief measures for listed issuers through a
joint media release issued on 17 February 2021.
A summary of the temporary relief measures announced in the joint media release are as follows:
- Extension of time to issue financial reports
An issuer listed on the Main Market or the ACE Market of Bursa Malaysia will be given an automatic one-month extension to issue its quarterly reports and annual reports (including the annual audited financial statements and the directors’ and auditors’ reports) that fall due by 28 February 2021, 31 March 2021 and 30 April 2021.
Similarly, an issuer listed on the LEAP Market of Bursa Malaysia will be given an automatic one-month extension to issue its semi-annual reports and annual reports (including the annual audited financial statements and the directors’ and auditors’ reports) that fall due by 28 February 2021, 31 March 2021 and 30 April 2021.
- Issuers with insignificant business or operations
An issuer listed on the Main Market or the ACE Market that has announced between 1 January 2021 and 30 June 2021 that it has ‘insignificant business or operations’ will be given a 12-month relief from complying with the obligations under the relevant listing requirements that arise from the triggering event. The issuer must, upon the expiry of the 12-month period from the announcement of the triggering event, re-assess its condition and announce whether the triggering event continues to subsist, and if affirmative, it must henceforth comply with all obligations under the relevant listing requirements that arise from the triggering event.
Under Paragraph 8.03A(2)(b) of the Main Market Listing Requirements (‘Main LR’) and Rule 8.03A(2)(b) of the ACE Market Listing Requirements (‘Ace LR’), an issuer is deemed to have ‘insignificant business or operations’ if its business or operations generate revenue on a consolidated basis that is 5% or less of (a) its share capital (excluding redeemable preference shares and treasury shares); or (b) in the case where the issuer is a unit trust, real estate investment trust or business trust listed on the Main Market, its unit holder capital, in each case based on its latest annual audited or unaudited financial statements.
- Cessation of business and PN17/GN3 listed issuer
An issuer listed on the Main Market or the ACE Market that has announced between 1 January 2021 and 30 June 2021 that it has suspended or ceased all or major business or operations or is classified as a PN17/GN3 listed issuer will be granted 24 months (instead of 12 months) from the date of its announcement to submit its regularisation plan to the SC for approval.
The expression ‘major’ is defined in Paragraph 8.03A(7)(a) of the Main LR/Rule 8.03A(7)(a) of the Ace LR as the proportion which is 70% or more of an issuer’s revenue on a consolidated basis based on its latest annual audited or unaudited financial statements.
An issuer is regarded as a PN17/GN3 listed issuer if any of the following arises:
- the appointment of receivers or managers or judicial managers over the asset of the issuer, its subsidiary or associated company which asset accounts for at least 50% of the total assets as set out in paragraph 2.1(b) of PN17/paragraph 2.1(d) of GN3;
- the winding up of a listed issuer’s subsidiary or associated company which accounts for at least 50% of the total assets as set out in paragraph 2.1(c) of PN17/paragraph 2.1(e) of GN3; or
- the expression by the auditors of an adverse or disclaimer opinion as set out in paragraph 2.1(d) of PN17/paragraph 2.1(f) of GN3.
- PN17/GN3 suspended criteria
An issuer listed on the Main Market or the ACE Market that triggers any PN17/GN3 suspended criteria between 17 April 2020 and 30 June 2021 will be granted 18 months (instead of 12 months) from complying with its obligations under the relevant listing requirements that arise from the triggering of the PN17/GN3 suspended criteria. The issuer must, upon the expiry of 18 months from its announcement of the triggering of the PN17/GN3 suspended criteria, re-assess its condition and announce whether it triggers any of the criteria in PN17/GN3, and if affirmative, it must henceforth comply with all obligations under the relevant listing requirements that arise from the triggering of any PN17/GN3 criteria.
Each of the following is a PN17/GN3 suspended criterion:
- the criteria on shareholders’ equity in paragraph 2.1(a) of PN17/GN3;
- material uncertainty relating to going concern and auditors’ qualification on going concern in paragraph 2.1(e) of PN17/paragraph 2.1(g) of GN3;
- default in payment in paragraph 2.1(f) of PN17/paragraph 2.1(h) of GN3; and
- in the case of an ACE Market issuer, the criteria on losses set out in paragraphs 2.1(b) and 2.1(c) of GN3.
Early termination of extended period
If an issuer which has triggered a PN17/GN3 suspended criteria or the insignificant business or operations criterion subsequently triggers a non-PN17/GN3 suspended criteria or the criterion on suspension or cessation of all or major business or operations within the applicable re-assessment period (i.e. 24 months or 12 months, as the case may be), the issuer must:
- announce that it has triggered the relevant criteria and where applicable, it will be classified as a PN17/GN3 listed issuer; and
- comply with all obligations under paragraph 8.04 and PN17 or paragraph 8.03A respectively of the Main LR or Rule 8.04 and GN3 or Rule 8.03A respectively of the Ace LR, as the case may be, from the date of the announcement.
Comments
The extension of time for the issuance of periodic reports will be welcomed by all listed issuers.
Issuers having financial issues or inadequate levels of operations will welcome the extension of time to regularise their affairs. However, it remains to be seen whether the extension of time will be effective in assisting affected issuers to resolve their affairs so as to avoid suspension and delisting of such issuers.
Alert by Fariz Aziz (Partner) and Kok Chee Kheong (Partner) of Skrine.