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SC issues reminder to Mudajaya

KUALA LUMPUR: The Securities Commission yesterday issued a caution and reminder to Mudajaya Group Bhd and its Board of Directors to strictly observe their disclosure obligations in relation to an overseas investment by the group.

In a statement here today, the SC said Mudajaya Group had failed to make adequate disclosures on pertinent matters relating to its investment in an
independent power plant (IPP) project in India.

It said it had reviewed the transactions relating to the group's investment in the IPP project in India, in particular the transfer of funds between related entities.

It had also on Aug 12, 2010 sought a S320 report under the Capital Markets & Services Act 2007 from the auditors of Mudajaya Group, Ernst & Young, whose report was dated Sept 9, 2010.

The S320 report had revealed movement of funds between Mudajaya Group and related entities pursuant to the IPP project that is characteristic of
the practice known as 'round-tripping'.

Round-tripping, also known as round-trip transactions is defined as a form of barter that involves a company selling "an unused asset to another company
while at the same time agreeing to buy back the same or similar assets at about the same price."

The SC said it viewed seriously the company's failure to make adequate disclosures prior to Aug 30, 2010.

Pursuant to the matter, the SC has also requested Bursa Malaysia to issue a directive to Mudajaya Group for additional disclosures to ensure that sufficient information is available for the market to make informed decisions. — Bernama
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