English

11 May 2018

MSWG’S WATCHLIST

TH HEAVY ENGINEERING BERHAD (“THHE”)
The Board informed that the company is still formulating the regularisation plan. The Board had on 27 April 2018 submitted an application for an extension of time (“EOT Application”) to submit the company’s Regularisation Plan to Bursa Securities, the decision on which is pending as at the date of this announcement. The company will make the necessary announcements on further developments in relation to the Regularisation Plan in accordance with the requirements under PN17 of the Main Market Listing Requirements.
[Source: THHE’s announcement on Bursa Malaysia’s website on 3 May 2018]

04 May 2018

MESSAGE FROM THE CEO

Getting a new director on board

When speaking about independent directors, often two informal categories come to mind - independent directors (as the job title suggests) and the truly ‘independent’ independent directors.

This cynicism stems from the fact that majority shareholders are entitled to elect independent directors (except where companies adopt two-tier voting as advocated by the Malaysian Code of Corporate Governance (MCCG) for independent directors who have served beyond 12 years and wish to continue as independent directors).

Independent directors are typically sourced from three sources, namely (i) existing board members; (ii) within the management; and (iii) among the company’s major shareholders. Obviously, this begs the question of ‘how independent’ these independent directors can really be, thus sparking a fair bit of cynicism.

The MCCG now advocates the casting of a wider net when nominating independent directors and goes on to state that reasons must be given if a board chooses not to cast a wider net.

30.04.2018

MARKET AND REGULATORY UPDATE

BURSA MALAYSIA LAUNCHES BURSASUSTAIN, A ONE-STOP KNOWLEDGE HUB ON CORPORATE GOVERNANCE AND SUSTAINABILITY

Bursa Malaysia has launched BURSASUSTAIN, a comprehensive online portal designed as a one-stop knowledge and information hub on corporate governance (“CG”) and sustainability.

BURSASUSTAIN was developed following extensive research, benchmarking and engagement with various stakeholder groups. The hub aims to provide a platform for users, such as listed issuers, investors and other key stakeholders, to have easy access to the latest information on CG and sustainability. Designed to be user-friendly, BURSASUSTAIN contains webcasts, case studies, commentaries, videos, reports, e-learning and weekly news updates from both local and international sources, to serve stakeholders with diverging needs.

The three key pillars housed in BURSASUSTAIN are as follows:

Corporate Governance pillar provides resources that help listed issuers understand the benefits and value of adopting good CG practices. Listed issuers can have a better understanding of managing and improving CG within their company with the availability of all relevant information under this section including the Malaysian Code of Corporate Governance, CG Guide and other guidance as well as various literature.

MESSAGE FROM THE CEO

Remote Participation and Voting at General Meetings

Many minority shareholders are unable to participate at general meetings and vote (except through proxies) due to the choice of venue for the general meeting.

Minority shareholders may, going forward, be able to do so as the MCCG (Malaysian Code on Corporate Governance) intends to enable shareholders to participate, engage the board and senior management effectively and make informed voting decisions at general meetings.

The two relevant key Intended Outcomes in MCCG relate to participation and voting at general meetings.

The MCCG states, that as a Practice, listed companies, with a large number of shareholders or which have meetings in remote locations, should leverage on technology to facilitate voting in absentia and remote shareholders’ participation at general meetings.

We note that quite a few companies have misinterpreted this Practice to mean electronic voting and have accordingly stated that they have adopted the said Practice and go on to explain about electronic voti

13.04.2018

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

COMFORT GLOVES BERHAD (“CGB”)

The Board of Directors of CGB clarified that on 15 March 2018, the group’s wholly owned subsidiary, Comfort Rubber Gloves Industries Sdn. Bhd. (“CRGISB”) was listed under Import Alert of the U.S Food and Drug Administration (FDA). This has resulted in CRGISB examination glove shipments to the United States (“U.S.”) requiring inspections upon arrival in the U.S and released after passing an inspection. The group is working towards removal from the Import Alert list through its U.S agents and is confident of securing the removal from the Import Alert list. The FDA Import Alert listing does not prevent the group from exporting to U.S. Upon removal from the Import Alert list, CRGISB examination glove shipments will no longer require inspection. Therefore, the operations of the group have not been disrupted by this incident and are continuing in normal operation.

[Source: CGB’s announcement on Bursa Malaysia’s website on 6 April 2018]

MSWG’S COMMENTS:

CGB share price plummeted by 37.5% within 10 days from RM1.12 on 27 March 2018 to as low as 70 sen on 5 April 2018. We believe the detention of CRGISB’s glove shipments by the U.S. regulator could be a notable contribution to the sharp drop in CGB’s share price.

We are of the opinion that the FDA Import Alert listing against the CGB group’s products would have significant impact on the Group’s financial performance, as the U.S. and Canada market contributed approximately 42.5% to the Group’s revenue. The impact on the financial performance will be from the lag time due to the need for pre-inspection and the risk that some customers may terminate/reduce their orders due to this pre-inspection lag time.