Lay Hong censured for inaccurate replies to UMA queries

One of nine layer farms owned by Lay Hong Bhd, which produces 2 million eggs per day.

KUALA LUMPUR: Lay Hong Bhd, which failed to reply to Bursa Malaysia Securities’ unusual market activity (UMA) queries in an “accurate, balanced and fair” way, was publicly reprimanded on Tuesday while its eight directors at the time were slapped with fines totalling RM750,000.

In a statement on Tuesday, the regulator said Lay Hong, in response to a Nov 2, 2015 query on the sharp rise in its share price, stated that there was no corporate development that had not been previously announced that might account for the trading activity, including those in the stage of negotiation or discussion.

On Jan 19, 2016, the processed chicken and egg producer again denied there was any unannounced corporate development after being queried over another incidence of a sharp rise in its share price.

“Lay Hong’s announcements dated Nov 3, 2015, and Jan 19, 2016, were not accurate, balanced and fair and failed to contain sufficient information to enable investors to make informed investment decisions, as the announcements did not disclose and in fact denied an impending corporate exercise involving, among others, a proposed bonus issue, share split and issuance of free warrants (the proposals),” Bursa Securities said.  

“The proposals were subsequently announced on Feb 2, 2016, i.e. approximately two weeks after Lay Hong’s announcement dated Jan 19, 2016, denying any other corporate development in the company including those in the stage of negotiation/discussion.”

Bursa Securities said the integrated poultry farming firm failed to make an immediate announcement on the proposals following its board of directors’ approval on Jan 26, 2016. The proposals were only announced on Feb 2, after a delay of four market days.

“Lay Hong’s material omission in failing to highlight the proposals as well as the misstatement in its denial of any corporate development including those in the stage of discussion/negotiation in its announcements were clearly in contravention of the disclosure obligations under the Main Market listing requirements,” the regulator said.

For inaccurate UMA replies and their failure to make an immediate announcements on the proposals, Lay Hong executive chairman Yap Hoong Chai and executive directors Yap Chor How and Ng Kim Tian were publicly reprimanded and fined RM150,000 each.

Executive director Yeap Weng Hong was publicly reprimanded and fined RM100,000, while four non-executive directors - Yeap Fock Hoong, Gan Lian Peng, Tan Ooi Jin and Cheng Chin Hong - were publicly reprimanded and fined RM50,000 each. (Cheng has since retired as director.)