KUALA LUMPUR (Aug 13): Bursa Securities has rejected Catcha Digital Bhd’s (formerly known as Rev Asia Bhd) proposed regularisation plan, as the regulator said the GN2 status company’s sponsor has not demonstrated the ability of the plan to comply with the ACE Market Listing Requirements.

The company and sponsor had not satisfactorily addressed Bursa Securities’ concerns on the suitability of the iMedia Group to regularise the financial condition of the company, Catcha Digital said in a filing.

“In the financial years under review, iMedia did not have any business operations and hence did not generate any revenue. The suitability and viability of iMedia, which is an investment holding company and the core operating business target of the company as part of its proposed regularisation plan, is based on a combination of five of its operating subsidiaries, which were only recently acquired by iMedia from different vendors.

“Given the above and the financial performance of the companies within the iMedia Group as well as the financial performance of the company for the financial year ended Dec 31, 2020, the company/iMedia had not demonstrated to the satisfaction of Bursa Securities on the suitability and viability of the enlarged iMedia Group to regularise the company's GN2 status,” the regulator said.

The bourse said the proposed plan may also result in a potential non-compliance with the public shareholding requirement due to the additional purchase consideration by the company to be satisfied by way of issuance of new shares.
Moreover, Bursa Securities said Catcha Digital has not undertaken several required assessments, including on the key internal controls for the company, the risk management system for iMedia, Oh Media Sdn Bhd, Ittify Sdn Bhd, Goody Technologies Sdn Bhd, Nara Media Sdn Bhd and Moretify Sdn Bhd.

The bourse noted that Goody Technologies, which is a 60%-owned unit of iMedia acquired on Dec 21, 2020, does not have a business licence, as it has been operating from a residential premise.

It said the company and sponsor’s justification was that Goody Technologies had on May 18, 2021 entered into a sublet agreement with Moretify, another 60% subsidiary of iMedia which was acquired on Jan 22, 2021, for the rental of part of Moretify’s office from May 18 to Dec 31, 2021, following which Goody Technologies will apply for a business licence for its new office premises.

Bursa Securities, however, said that the company is still operating without a business licence and therefore there remains concerns over the corporate conduct of Goody Technologies and the legality of its business operations.

In confirming its compliance, the bourse said that the sponsor should demonstrate “sound understanding of, amongst others, the applicant's business and operations including its historical financial information”.

“The company and the sponsor’s explanations and justifications on the historical financial information of the iMedia Group were based on a proforma historical financial information of the companies within the iMedia Group which had different financial year ends and different financial periods for a particular year end.

“In addition, the financial information for the latest financial year was prepared on a consolidated basis with the inclusion of only three out of the five subsidiaries,” it said.

“As such, Bursa Securities is not satisfied that the company and the sponsor have a sound understanding of the suitability of the enlarged iMedia Group to regularise the company's GN2 status,” it added.

Catcha Digital said it intends to make an appeal in relation to the decision, with any relevant announcements to be made in due course.

In September last year, Catcha Digital, then known as Rev Asia, had proposed the acquisition of iMedia Sdn Bhd for RM10 million as part of its regularisation plan.

Rev Asia has been a cash company following the sale of its then digital asset — Rev Asia Holdings Sdn Bhd — to Media Prima Bhd for RM105 million in 2017.

Catcha Digital’s share price fell 6.5 sen or 20% to close at 25.5 sen, giving it a market capitalisation of RM34.33 million.