KUALA LUMPUR (Sept 15): After being slammed by Bursa Malaysia Securities Bhd for two listing requirement breaches that led to the rejection of the proposed initial public offering (IPO) of an ACE Market applicant for which it was the sponsor and principal adviser, RHB Investment Bank Bhd (RHB IB) said it has reinforced its due diligence processes.
In a statement on Friday addressing the matter, RHB IB said it takes the beaches seriously and has in turn reviewed and enhanced its processes, including the client review process, to be more robust.
“We are also working with an external adviser to ensure that RHB IB continues to align our due diligence processes and procedures to market’s best practices.
“The enhancement of the due diligence processes and procedures, coupled with strong commitment and cooperation from our clients and all other parties involved will raise the quality and standards of the due diligence further,” said RHB IB managing director and CEO Ganesh Sabaratnam.
He further pledged that the investment bank will continue to exercise a higher degree of due diligence and compliance to regulatory requirements in undertaking its responsibilities.
The statement came a day after RHB IB was publicly reprimanded by Bursa Securities and hit with a RM350,000 fine for two listing requirement breaches — one for failing to conduct proper due diligence to ensure there was no misstatement or material omission in the IPO applicant's submission and disclosures to Bursa, and another for its failure to immediately notify Bursa Securities of material developments concerning the applicant's business and operations.
Bursa, in announcing its decision, also highlighted that it was not the first time RHB IB had breached the listing requirements, saying the public reprimand and fine on RHB IB were made after taking into consideration all facts and circumstances of the matter, "including the materiality of the breaches, the roles and responsibilities of RHB IB as the sponsor and principal adviser, and the fact that RHB IB had previously breached the listing requirements".
On top of the reprimand and fine, RHB IB had been tasked with tabling Bursa Securities’ decision to its board and conduct a comprehensive review and assessment on the adequacy and effectiveness of its internal policies, processes and procedures in relation to its role as an IPO adviser/sponsor.