Investors to enjoy better protection under new listing rules

Published: 2009/05/09

INVESTORS will get better protection under new listing rules that will be put in place as part of plans to improve Malaysia's stock market.For related party transactions (RPTs), companies will have to tell their shareholders the opinion of their audit committee and directors.

Essentially, the audit committee will have to say why the deal is good for the company.RPTs are normally deals that involve a common substantial shareholder. Such deals often raise concerns because they are often done at the expense of minority shareholders.

Under the new rules, companies will also have to immediately announce if its independent adviser provides a different value for the deal and the reasons for the difference.

"Investors must have a continuous flow of information," Selvarany Rasiah, chief regulatory officer of Bursa Malaysia, told a media briefing on Thursday.These changes come in the wake of recent high-profile deals that have raised corporate governance concerns in Malaysia.

Last November, Resorts World Bhd said it would buy a tenth of a digital gaming company from a company linked to its chairman and chief executive Tan Sri Lim Kok Thay.

That deal was worth RM250 million.Another deal involved MMC Corp Bhd buying airport owner and operator Senai Airport Terminal Services Sdn Bhd for RM1.7 billion.

Bursa Malaysia will also cut short the time needed to suspend shares and for company insiders to announce their share transactions.It will now take only five market days from three months previously to suspend the stock of a company that fail to publish its accounts on time. Trading halts will also be cut to just one hour instead of one trading session currently.