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09 June 2010

SC, Bursa vow action if BCorp broke rules in Ascot buy

The Securities Commission (SC) and Bursa Malaysia will take appropriate action should there be elements of misrepresentation with regards to Berjaya Corporation Berhad’s (BCorp) proposed acquisition of a 70 per cent stake in Ascot Sports Sdn Bhd for its sports betting licence which the government has denied issuing.

In a statement here today, a spokesperson for SC said both Bursa Malaysia and SC would take appropriate action as provided for by the Listing Requirements and the securities laws.

“Bursa Malaysia is looking into this matter, including the disclosures and statements made by BCorp and other parties,” the spokesperson said in the statement published by the Bernama news agency.

The spokesperson said in this regard, Bursa Malaysia would take appropriate steps, including where necessary, requesting BCorp to issue further clarification.

The Malaysian Insider reported this morning that the SC had told Bursa to query BCorp, which is owned by tycoon Tan Sri Vincent Tan — the main shareholder of Ascot Sports.

Bursa yesterday referred The Malaysian Insider to the company’s announcement of its intended acquisition of a controlling stake in Ascot Sports, which was not unconditional, and declined to comment on whether it would query Berjaya Corporation.

“Bursa Malaysia highlighted to The Malaysian Insider that the conditions of the re-issuance of the licence is stated in the announcement made by Berjaya Corp Berhad on 12 May 2010,” a Bursa official wrote in an e-mail response to questions about whether Berjaya Corporation would be queried.

In the announcement, Berjaya Corporation had stated that “the Minister of Finance has given its approval for the re-issuance to Ascot of the licence to carry out sports betting operations upon certain terms and conditions.

“Ascot proposes to commence its sports betting operation in the 2nd half of the year 2010 with its retail betting operations being housed at 220 selected Sports Toto outlets, subject to relevant approvals being obtained.

“In addition, Ascot also proposes to provide telephone betting services to customers who wish to register accounts with them. The primary focus of Ascot will be on sports betting on soccer games in the initial stages with the aim of increasing their product service offering to other sports in the future subject to the terms and conditions of the licence.”

However, Berjaya Corporation also stated that its proposed acquisition of Ascot Sports was conditional on, among others, “the re-issuance of the licence pursuant to Section 5(1) of the Pool Betting Act, 1967 (revised 1983) or such other laws or legislation that regulate or govern the conduct and operation of the sports betting operations of Ascot by the Minister of Finance to Ascot.”

The proposed acquisition by Berjaya Corporation of Tan’s 70 per cent stake in Ascot included a personal guarantee from the tycoon that the company would make a cumulative net profit of at least RM375 million for the first three years of operation.

Bursa Malaysia officials had pointed out today that because of the conditions of the proposed acquisition, Berjaya Corporation’s filing was accurate.

If the company and its directors, including Tan, had misled the exchange, they would have been subject to sections 177 and 369 of the Capital Markets and Services Act 2007.

Section 177 states: “A person shall not make a statement, or disseminate information, that is false or misleading in a material particular and is likely to induce the sale or purchase of securities by other persons or is likely to have the effect of raising, lowering, maintaining or stabilising the market price of securities if, when he makes the statement or disseminates the information — (a) he does not care whether the statement or information is true or false; or (b) he knows or ought reasonably to have known that the statement or information is false or misleading in a material particular.”

Section 369 of the same Act states that a person who knowingly makes a false or misleading statement to the Commission or stock exchange relating to the affairs of a listed corporation shall, on conviction, be liable of a fine not exceeding RM3 million or to imprisonment for a term not exceeding 10 years or both.

It was reported last month that the government had re-issued the licence to Ascot Sports after the original licence was cancelled by the previous administration under Tun Abdullah Ahmad Badawi.

Tan had first obtained the licence in 1987 but had “asked the government to take it back” when the venture was unsuccessful. He retained the right of first refusal if the government decided to re-issue the licence.

Ascot Sports, which is currently a dormant company, recorded net liabilities and net loss of RM11.2 million and RM4.6 million respectively for the financial year ended December 31, 2008


S.C. and Bursa Malaysia, if both agencies have some credibality in its word, Vincient Tan document itself to Bursa will talk whether any law have been broken. Simply exhibit the document and the public will know the commision of the offence. S.C. and Bursa please exhibit the document. It is definately not a Official Secret document (Sulit) under the Official Secret Act. It is a public investment document. Please don't cheat the public.

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