KUALA LUMPUR: Following a severe reprimand and fine by Bursa Malaysia Securities Bhd (Bursa Securities) for violating listing requirements, RHB Investment Bank (RHB IB) has declared its commitment to strengthen its due diligence procedures.
Managing director and CEO Ganesh Sabaratnam said the bank will exercise a “higher degree of due diligence and compliance” with regulatory requirements in carrying out its responsibilities.
“We take this matter very seriously and have reviewed and enhanced our due diligence processes and procedures, including the review process of our clients, both quantitatively and qualitatively, to be more robust,” he said in a statement today.
In a statement yesterday, Bursa Securities reprimanded and imposed a fine of RM350,000 on RHB IB for breaching ACE Market listing requirements.
The two listing requirement breaches led to the rejection of the proposed initial public offering (IPO) of an ACE Market applicant for which RHB IB was the sponsor and principal adviser.
This is not the first time the investment bank had flouted listing rules. In its statement, Bursa Securities pointed out RHB IB had “previously committed breaches of the listing requirements”.
The exchange regulator stressed the bank’s board needed to conduct a comprehensive review and assessment of the adequacy and effectiveness of its internal policies, processes and procedures relating to its role as an adviser for submissions to Bursa Securities.
Ganesh said RHB IB is currently working with an external adviser to ensure the bank continues to align with due diligence processes and procedures to market best practices.
“The enhancements to the due diligence processes and procedures, coupled with a strong commitment and cooperation from our clients and all other parties involved, will further raise the quality and standards of due diligence,” he added.
Bursa Securities said yesterday RHB IB failed to conduct proper due diligence to ensure all material information was accurately disclosed.
It also failed to immediately notify the exchange of material developments concerning the IPO applicant’s business, operations, future plans, and prospects after the initial submission of the proposed listing.
“RHB IB had failed in the discharge of its duties as the sponsor and principal adviser which was unacceptable, particularly in view of the numerous engagements and queries by Bursa Securities,” it added.