KUALA LUMPUR (May 23): The Securities Commission Malaysia (SC) has reprimanded Khee San Bhd and its directors for failing to comply with approved accounting standards within the financial years ended June 30, 2015 and 2016 (FY15 and FY16).

In a filing with Bursa Malaysia today, Khee San said given the seriousness of the breach, the SC has imposed a total fine of RM1.86 million on the directors.

Two existing directors of Khee San, who are also audit committee members, Leslie Looi Meng and Huang Yan Teo, and an ex-director Datuk Seri Liew Kuek Hin, who at the material time was a member of the audit committee, were fined RM392,000 each.

Two other existing directors Datuk Seri Liew Yew Chung and Liew Yet Mei were fined RM343,000 each.

The SC sanctions arose as a result of its findings that Khee San had failed to comply with the relevant Malaysian Financial Reporting Standards extended to various distinct areas within FY15 and FY16.

The SC has also directed Khee San to rectify and re-issue its audited financial statements for FY15 and FY16, and for Khee San to appoint an external auditor to re-audit the financial statements for both years.

Based on the findings of the re-audit of the financial statements of both years, Khee San is to rectify and re-issue the audited financial statements and all quarterly results and audited financial statements issued subsequent to its FY16 audited financial statements.

The re-audit of its audited financial statements for FY15 and FY16, and the restatement of its accounts are to be completed by Khee San within six months.

Khee San has also been asked to seek appropriate independent professional advice to reconstitute an effective audit committee.

"The group is to consult and appoint an independent consultant for an assessment of the effectiveness of Khee San's current audit committee, particularly on the level of knowledge, skills, expertise and commitment of the audit committee members in discharging its responsibilities effectively and make appropriate recommendations," it added.

The assessment of the audit committee must be completed by Khee San within three months from the completion of the restatement of accounts.

According to Khee San's annual reports from 2015 to 2017, Messrs Adam & Co are listed as Khee San's external auditors.

Khee San shares closed down 2.4% at 61 sen today, for a market capitalisation of RM63.4 million.