KUALA LUMPUR: YFG Bhd, which announced its plan to raise up to RM100 million through a proposed issuance of redeemable convertible notes earlier this month, has been fined RM200,000 by the Securities Commission (SC) for knowingly authorising false or misleading statements to be furnished in its amended audited financial statements (AFS) to Bursa Malaysia on Nov 5, 2014.

In a filing with Bursa yesterday, the electrical and mechanical engineering services provider said the company and its board of directors received letters dated May 13, 2015 from the SC, informing them that the regulator had imposed sanctions against them as at Nov 5, 2014, for the above offence.

“The SC found the impairment loss adjustment of RM3.375 million made in the amended AFS of the company for the financial year ended June 30, 2014, was unascertainable.

“As such, the company is required to rectify and reissue its AFS for the year ended June 30, 2014, by reinstating the impairment loss of RM8.442 million and making the necessary consequential amendments to its financial statements accordingly within one month from the date of the letter,” the announcement read.

The SC found that the company had breached Section 354(1)(a) read together with Section 369(b)(B) of the Capital Markets and Services Act 2007. As such, it had reprimanded the company’s board of directors and fined it RM200,000. “The company will review its amended AFS again and reply to the SC within the stipulated time,” said YFG.

To recap, YFG announced on May 8 that it wants to raise RM100 million through the proposed issuance of redeemable convertible medium-term notes (MTN) with a tenure of five years. The amount to be raised is double of YFG’s market capitalisation of RM51.8 million, based on yesterday’s closing at 8.5 sen.

It said the MTN is to be issued in six tranches, subject to terms and conditions in the subscription agreement.

This article first appeared in The Edge Financial Daily, on May 15, 2015.