KUALA LUMPUR (Nov 11): Bursa Malaysia Securities Bhd has reprimanded Solar District Cooling Group Bhd (KL:SDCG) for breaching the ACE Market listing requirements on public shareholding spread at the time of its listing.

The local bourse said it found that SDCG had failed to comply with one of the listing requirements, which requires an applicant to have at least 25% of its shares held by a minimum of 200 public shareholders, each holding not less than 100 shares.

According to Bursa Malaysia Securities, SDCG’s public shareholding spread stood at only 24.75%, slightly below the 25% minimum threshold, at the time of its listing on the ACE Market on Sept 19, 2024.

Bursa said the shortfall occurred following SDCG’s instruction to reallocate additional pink form shares to a director of one of its wholly-owned subsidiaries, who was not classified as a public shareholder under the ACE Market's listing requirement.

This reallocation deviated from the approved pink form list endorsed by SDCG’s board on Aug 2, 2024, resulting in temporary non-compliance with the spread requirement.

"SDCG had only complied with the public shareholding spread requirement after SDCG’s listing ie at the close of business on Sept 19, 2024, following the disposal of the director’s shares in the open market," the bourse operator highlighted.

Bursa also added that SDCG had been explicitly advised before listing that its directors were not permitted to apply for additional pink form shares beyond those approved, as doing so would risk breaching the public spread requirement.

“Despite this, the company proceeded with the reallocation without notifying its adviser,” Bursa said.

The reprimand was issued pursuant to Rule 16.19(1) of the ACE-Market listing requirement after completion of due process, taking into account the facts, materiality and conduct of the company, according to Bursa Malaysia Securities.

“Bursa Malaysia Securities views the breach seriously as the public shareholding spread requirement is fundamental to ensure sufficient market liquidity and free float towards facilitating and orderly and fair trading of shares,” the exchange said in a statement posted on SDCG’s corporate page.

It added that while Bursa did not find any of SDCG’s directors directly responsible for the breach, it reminded the board to uphold appropriate standards of corporate responsibility and accountability and to ensure strict adherence to listing rules going forward.

At the time of the breach, SDCG’s board consisted of Kong Kam Onn, Liuk Ing Hong, Ir Dr Khairul Azmy Kamaluddin, YM Raja Nor Azlina Raja Azhar, Wong Poh May and Wong Keng Fai.

SDCG shares settled half a sen or 0.89% higher at 56.5 sen on Tuesday, valuing the company at RM239.46 million market capitalisation. Year to date, its share price has appreciated nearly 3%.