Bursa fines, reprimands five Industronics directors

This article first appeared in The Edge Financial Daily, on October 16, 2019.
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KUALA LUMPUR: Bursa Malaysia Securities Bhd has publicly rapped five individuals, who were directors at Industronics Bhd at the material time, and fined four of them for failing to ensure transactions Industronics undertook for a proposed share subscription in Singapore-listed Vashion Group Ltd in 2014, would not be detrimental to the company and its shareholders.

Among the five are Industronics' executive director Amy Liu Wing Yee and independent director Lu Zhi Qin, both of whom are still on Industronics' board. The remaining three are: former independent non-executive chairman Jacob Leung Kwok Kuen, and former independent non-executive directors Tsui Kwok Ho and Fung Ling Yip.

Leung, Tsui and Fung resigned last year. Lu, meanwhile, is also a member of Industronics' audit committee, which Fung used to chair before his resignation in July 2018.

Liu and Leung were both fined RM200,000 each, while Tsui and Lu were fined RM50,000 each.

In a statement, Bursa said Liu, Leung, Tsui and Lu had breached the rules of the Main Market listing requirement when they failed to ensure that an advance of S$2.5 million paid to Vashion in 2014 were fair and reasonable to Industronics, and not to the detriment of shareholders. The advance was made after a conditional deposit agreement was inked between Industronics and Vashion in July that year for the proposed share subscription.

Then, together with Fung - who was appointed to the board on Dec 10, 2014, after the deposit agreement was inked - all five had failed to ensure that the continuing advances made to Vashion up till June 2016 were fair and reasonable to the company.

It also said there had been no evidence of any proper enquiry or justification undertaken by the directors before entering into the deposit agreement and payment of the deposit.