AQRS IPO on despite SC reprimand

PETALING JAYA: The reprimand meted to Affin Investment Bank Bhd and two individuals – Ng Kit Heng and Ow Chee Cheoon – by the Securities Commission (SC) will not affect the initial public offer (IPO) exercise of property and construction firm Gabungan AQRS Bhd.

Affin Investment together with Ng and Ow, the promoters of AQRS, were reprimanded by the SC on March 21 for breaches of the Guidelines for due diligence conduct for Corporate Proposals. Affin was made the company’s principal adviser, underwriter and placement agent last August.

Among the other breaches listed on the regulator’s website were those on the Equity Guidelines as well as the Capital markets & Services Act 2007.

A spokesperson for the company said the IPO would go ahead. “Gabungan AQRS is in the process of preparing for its listing on the Main Market of Bursa Malaysia Securities Bhd as approved by the Securities Commission.”

He told Starbiz that the reprimand was for an omission in the corporate proposal. “The company regrets this unintentional indiscretion and will ensure strict adherence of good corporate governance and practices as it becomes a publicly-listed company.”

Meanwhile, sources said the issue that brought about the reprimands was the ownership of a piece of land that was not brought to the investment bank’s knowledge until after the first submission of AQRS’ prospectus.

“The investment bank was not made aware of the land ownership, therefore the land which belongs to Ng and Ow was not listed in the first submission,” a source said.

The source said when Affin was made aware of it, this was rectified in the second submission of the prospectus. “The important points to make are that the prospectus was not issued to the public and when the investment bank found out about the omission, it was disclosed in the second submission.”

An Affin Investment spokesperson said in an email reply that measures to rectify the conflict of interest situation had been discussed and agreed on.

“We’re now working closely with the company to implement the corporate proposal, which is targeted for completion in the third quarter of 2012,” he said.

AQRS made the decision to postpone the listing last September in view of the volatility of global stock markets.