KUALA LUMPUR: Three executive directors (EDs) of marine construction services provider Benalec Holdings Bhd, together with the company, have been publicly reprimanded by Bursa Malaysia for breaching the regulator’s listing rules over some related-party land disposals.

The three are Benalec managing director Datuk Leaw Seng Hai, and his younger brothers Datuk Leaw Tua Choon and Datuk Leaw Ah Chye. The trio were also fined RM250,000 in total, according to the regulator’s listing circular yesterday.

Bursa said the company and the trio had breached its Main Market Listing Requirements (Main LR) for failing to make an immediate announcement, appoint an independent adviser and procure shareholders’ prior approval in relation to the disposal of four pieces of leasehold land in 2012.

The land parcels, located in Melaka Tengah, measures about 93,126 sq m. The total consideration for the disposals was RM28 million cash.

Benalec’s wholly-owned unit, Strategic Land Sdn Bhd, entered into the sale and purchase agreements for the disposals with Sunshine 2000 Sdn Bhd and Seaside Synergy Sdn Bhd on Jan 18 and March 12, 2012, respectively.

Bursa said Benalec had also failed to appoint an independent adviser and procure shareholders’ approval prior to the heads of agreement announced on Dec 5, 2013, in relation to the rescission and cancellation of the land disposals.

“Bursa Malaysia Securities views the contraventions seriously in view of the importance of the related-party transaction requirements under the Main LR, which serve to govern potential conflicts of interest which may give rise to potential abuses vis-à-vis transactions by listed companies to the detriment of shareholders,” the local bourse said.

The breaches were detected following a complaint to the regulator in March 2013 that the land disposals were related-party transactions involving the interests of Ah Chye and Tua Choon.

“The land disposals were only announced by Benalec as related-party transactions on March 13 and 31, 2014,” the filing read.

Based on its investigation, Bursa said Sunshine 2000 and Seaside Synergy were indeed connected to Ah Chye and Tua Choon, connections which the duo had failed to disclose to Benalec’s board of directors.

Moreover, both Ah Chye and Tua Choon concealed and persistently denied their interests in the land disposals from Benalec and its board, despite being asked by the board after the complaint.

Meanwhile, Bursa said Seng Hai, who is in charge of the day-to-day management of Benalec, should have been aware of the anomalies or unusual circumstances of the land disposals.

“Notwithstanding these, he had failed to undertake due enquiry and address these anomalies resulting in the breaches of the Main LR by Benalec,” Bursa said.

Benalec shares closed unchanged at 61 sen yesterday, with a market capitalisation of RM487.47 million.

This article first appeared in digitaledge Daily, on August 12, 2015.