This article first appeared in The Edge Financial Daily on July 4, 2018 - July 10, 2018

KUALA LUMPUR: The Securities Commission Malaysia (SC) has reprimanded China-based Multi Sports Holdings Ltd for knowingly submitting false and misleading financial statements to the stock exchange regulator, which violated Sections 353 and 369 of the Capital Markets and Services Act 2007 (CMSA).

“As such, pursuant to Section 354(3)(c) of the CMSA, the

SC reprimands Multi Sports taking into account the fact that new directors have been appointed to the board and efforts are being made to regularise its operations and financial condition,” Multi Sports, a Practice Note 17 company, said in a filing with Bursa Malaysia yesterday.

Under the CMSA, Section 353 deals with disclosure of information related to the dealing of securities, while Section 369 deals with false reports furnished to the SC, stock exchange or approved clearing houses.

The SC is empowered by Section 354(3) to take action against any entity or person which has breached the law under the CMSA.

With regard to the offences related to the failure to disclose relevant information, Multi Sports said it had failed to disclose the outstanding liabilities under the eight loans owed by its operating subsidiary in China, Jinjiang Baixing Shoe Materials Co Ltd.

“In the said financial statements, it was disclosed under ‘interest-bearing bank borrowings’ that Multi Sports’ liabilities were 11.5 million yuan only instead of the liabilities highlighted in the SC’s notice to show cause dated Feb 13, 2018,” Multi Sports said.

Multi Sports added that the non-disclosure of the outstanding liabilities had caused its financial statements, which were lodged with Bursa Malaysia, to contain false or misleading information relating to its operating affairs.