Bursa classifies Scan Associates as GN3 after High Court dismisses suit

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KUALA LUMPUR (May 18): Bursa Malaysia announced today that information technology security solutions provider Scan Associates Bhd is now classified as a Guidance Note 3 (GN3) company, following the High Court’s dismissal of the latter’s application to halt the classification today.

Scan Associates (fundamental: 0; valuation: 0.3) is the fourth company to be admitted to Bursa Malaysia’s GN3 list, after AsiaEP Resources Bhd, Cybertowers Bhd and R&A Telecommunication Group Bhd.

“The High Court today has dismissed the company's application for further injunction. As such, Bursa Malaysia today classifies Scan Associates as a GN3 company with effect from May 18, 2015, in accordance with the ACE-market listing requirements,” the stock exchange regulator said in a filing.

To recap, Scan Associates was granted an ad interim injunction by the High Court on May 11, to restrain Bursa from implementing the classification on the company.

Subsequently, the company announced the following day, that it was suing Bursa for the classification, saying it disagreed with Bursa’s directive.

Following the classification today, Bursa said Scan Associates is required to ensure strict adherence and compliance with its GN3 status in the ACE-market listing requirement.

Bursa said Scan Associates triggered Rule 2.1(b) and 2.1(c) of the ACE-market listing requirement, when it had incurred losses that exceeded its shareholder’s equity.

In financial year ended Dec 31, 2014 (FY14), Scan Associates saw its net loss widened to RM7.1 million, from RM2.33 million in FY13. This brought its total liabilities to RM9.54 million, which is 53% higher than its total equity of RM6.247 million.

The stock has slumped 64.29% from 14 sen on April 24 to 5 sen today, valuing the company at below its net asset per share of 7 sen. Its market capitalisation now stands at RM10 million.

Year-to-date, Scan Associates has lost half its market value, after dropping 50% or 5 sen.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)