Ireka directors reprimanded for Pan Borneo disclosure failures

| Ireka

SABAH

1. Regulatory Breaches and Disclosure Failures

   • Ireka Corporation Berhad and seven of its former directors were publicly reprimanded and fined a total of RM425,000 by Bursa Malaysia Securities.

   • The breaches stemmed from failure to provide accurate, complete, and timely disclosures under the Main Market Listing Requirements regarding a RM1.07 billion Pan Borneo Sabah highway subcontract.

   • Key lapses included:

     • Omission of material facts in an announcement dated 8 October 2024 regarding the Letter of Award (LOA) to Shoraka Construction Sdn Bhd.

     • Failure to disclose that contract execution was contingent upon approvals and financing conditions.

     • Delay in disclosing the failure to execute the Articles of Agreement (AOA) within the stipulated timeframe.

       
       

2. Project Structure and Risk Non-Disclosure

   • The Pan Borneo Sabah Phase 1B subcontract was structured with multi-level subcontracting and relied on approvals from the Malaysian Public Works Department (JKR) and MTD Construction Sdn Bhd, as well as funding arrangements.

   • These material dependencies were omitted, depriving investors of insight into the risk of contract termination if approvals or financing were not obtained.

     
     

3. Timing and Communication Failures

   • Ireka failed to promptly disclose:

     • The non-execution of the AOA within the required 45-day period and extended deadlines.

     • The loss of the LOA following termination of the project operations management agreement between MTD Construction and Gammerlite on 30 June 2025.

   • Although informed of termination on 1 and 8 July 2025, Ireka only announced it on 28 July 2025, constituting a significant reporting delay.

     
     

4. Materiality and Market Impact

   • The RM1.07 billion subcontract was highly material relative to Ireka’s revenue of RM36.8 million for the year ended 30 June 2024.

   • The scale of the contract meant that disclosure failures significantly impacted investor understanding of company prospects and risks.

     
     

5. Directors’ Penalties and Responsibilities

   • Former senior leadership penalised included the Group Managing Director, Deputy Managing Director, Executive Director, and several independent and non-executive directors.

   • Penalties ranged from RM50,000 to RM100,000 per individual, reflecting the roles and responsibilities of directors in ensuring regulatory compliance.

     
     

6. Delisting and Residual Issues

   1. Although Ireka was delisted from Bursa Malaysia on 10 March 2026, the breaches were committed while still listed, and Bursa emphasised that regulatory obligations persisted until delisting.

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