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CN Asia lands in hot soup after diversifying into moneylending

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The company and seven directors reprimanded, fined by Bursa Securities for not getting approval first.

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Bursa Securities said CN Asia breached stock exchange rules by failing to get shareholders’ approval prior to diversifying its business to include moneylending. (CN Asia pic)

PETALING JAYA:
Bursa Malaysia Securities Bhd (Bursa Securities) has publicly reprimanded steel products manufacturer CN Asia Corp Bhd and seven of its directors for failing to get shareholders’ prior approval to undertake a diversification into the moneylending business.

The seven including independent non-executive chairman Zulkifli Abdullah and non-independent non-executive deputy chairman Tan Choon Hwa were also fined a total of RM225,000. The directors were fined between RM25,000 and RM30,000 each.

In a statement today, Bursa Securities said the company breached the Main Market Listing Requirements for failing to obtain prior shareholders’ approval in respect of the diversification of its business to include moneylending.

The company had entered into a share sale agreement (SSA) on April 15, 2021 to acquire 100% of the issued share capital in Southborn Capital Sdn Bhd (SCSB), a company engaged in providing moneylending services.

CN Asia only obtained its shareholders’ ratification of the diversification on June 24, 2022, said Bursa Securities.

The stock exchange regulator said it “views the contravention seriously” as the requirement to obtain shareholders’ prior approval for material diversification in operations is fundamental to protect the interest of shareholders.

It also reminded the company and its board of their responsibilities to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public.

The group is an investment holding company whilst its subsidiary is involved in the manufacturing of steel-based products including structural steel, liquified petroleum gas vessels, road tankers and pressure vessels.

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